- CBOT prices have suffered losses as a warmer and drier weather forecast has brought the bears (now out of hibernation) to the forefront. US corn plantings, which have been delayed by cold weather, are at their lowest level on record at 4% compared to the five year average of 16%. Why bearish then? The answer appears to lie with the improved weather forecast and hope that the key 10th May date, after which yield can be negatively impacted.
- US winter wheat condition has reached 33% poor/very poor, an increase of 2% vs. a week ago and 10% last year, with good/very good dropping a point to 35%, last year’s level was 63%. Clearly we are seeing a very different crop condition from last year, weather in coming weeks will be the key determinant of final output.
- European wheat prices were also pressured, no doubt US losses assisted, but new crop levels succumbed to improved weather prospects. Russia and Ukraine however, have a less favourable outlook right now as dry conditions and slow spring planting progress continue to put a lid on potential output. Australian wheat planting looks as if it will take place under very dry conditions once again with follow up “rain dances” to aid crop germination and development.
- As previously reported, the markets are now seeming to be all about the weather.