- Chicago corn and soybeans traded higher whilst wheat eased today. LIFFE wheat made gains whilst MATIF wheat eased; the factor here appears to be the change in currency as £Stg eased vs. €uro.
- It is probably fair to suggest that a bearish mentality continues to dominate, particularly as the US farmer pushes to get corn and soybeans planted ahead of further rains scheduled for the Wednesday to Monday timeframe. Asian markets offer some bullish potential but Chicago bearish overtones dashed this. It seems that Chicago has the measure of global stocks and forthcoming supplies, and the real question lies in, “What will the coming season truly bring?”
- The EU crop monitor raised their forecast for EU soft wheat yields to 6.05 mt/ha from 6.02 last month which is up 8% from last year. The EU also raised their corn yield to 7.13 mt/ha from 7.12 last month. Winter rapeseed was cut slightly from 3.29 to 3.27 mt/ha. The dry weather has not yet caused huge harm, but the dryness is becoming a concern as generally dry forecasts are called for the coming ten days. It will be key that above normal rainfall falls during May.
- The Russian Agmin has cut their wheat crop estimate to 63.9 million mt, down around 9 million from last year. This crop is lower than most in the trade are suggesting in terms of a 2017 crop of 67-70 million mt. Weather has so far been OK, but the forecast is dry/warm going forward which should favour spring seeding, assuming that the rains return. The Black Sea has enjoyed four years of above trend-line wheat yields. History reflects that every 5-6 years the Black Sea endures a significant crop loss. The question is whether 2017 will be the year where Russia harvests a reduced trend grain crop.
- The trade is generally supporting a view that US farmers were able to make strong corn seeding progress on the weekend with some estimates as high as 20-22%. Funds continue to sell wheat on a bet of a further increase in condition ratings. US farmers do not appear to want to sell wheat as prices scrape along the loan level. World wheat production is (at long last) coming down and too much rain looks to fall across the Midwest into mid May. Coming weeks will be interesting and we continue to caution against tuning too bearish at current prices.