- Turnaround Tuesday folklore comes to life once again as soybeans see short covering offering support. Yesterday’s failure to close at a new low saw the bulls emerge from their lair. Slightly lower soybean seeding progress in KS/MO despite a drier forecast saw prices higher.We doubt the market’s ability to maintain upward momentum as the forecast suggests dry and warm conditions next week. Plentiful soil moisture levels also suggest that there is little to raise concern over planting delays across MO and KS.
- Corn and wheat prices have lagged behind the soybean rally as the wheat harvest is only just around the corner and most of the corn acres are now planted. Weather forecasts have little, if anything, in the way of extreme heat to disrupt pollination, which could prolong any rally.
- More topically today is tropical storm Bill that is hitting the headlines. The remains of the storm are looking likely to push through the E Plains and into AR/MO as well as S IL. Heavy rainfall is likely across the E Plains with maybe 0.5”/2.5” across MO, IL, IN. Warmer and dryer conditions are forecast to follow, which will aid both planting and crop development.
- Matif wheat and corn markets have been described as “desperately” quiet as AgriMer forecast lower French wheat stocks for 2014/15 at 3 million mt, 600,000 mt below their last estimate, as EU export volumes continue to flow at a rapid pace. The volume of French soft wheat exports (non EU) is put at 11.1 million mt, up from 10.6 million mt previously estimated.
- To conclude, a couple of longer term thoughts suggest that in wheat, projected Russian wheat output at trend yield, which is 5% below last year together with the USDA’s area forecast gives an output of 59.5 million mt. The USDA’s latest forecast of 55 million mt suggests a 12% decline in yield year on year. Few suggest that this is likely this year. In corn, there is no immediate weather issue and US farmers continue to hold large old crop stocks. S American corn will be coming to market at the same time as the US harvest! In soybeans we can find little evidence that the “big picture” has changed.