- Markets are generally lower once again in the run up to tomorrow’s USDA update in which many are expecting to see a rise in US 2014/15 corn stocks. With rain also forecast for much of Kansas next week it seems that traders are happy (at present) to sell the grains and also take a profit on short soybean positions. Corn weakness could also be partially attributed to a sharp drop in crude oil prices as Saudi Arabia has record large production and exports as they attempt to maintain market share. US crude stocks continue to build and could well test storage capacity by the middle of next month unless production is slowed by price!
- Additional rainfall which is forecast for the US Delta and mid-south could see farmers contemplating seeding another crop like soybeans or rice vs. corn. Some 4.5 million acres of corn are planted across the Delta region and as much as I million of these could be switched to another crop if financially viable. Also wet conditions could delay planting of corn to the point that the risk of pollination during peak summer temperatures will be too great.
- Argentine farmers are noted as heavy sellers of soybeans with record yields being reported in pretty much all areas. However, it seems that buyers are less willing and fresh global demand is scarce right now leaving Argentine cash basis on the decline, which makes them favourable when compared with Brazil.
- Aside from wet weather conditions in the US Delta region it is difficult to find cause to become bullish right now.