- The June crop report held little in the way of surprises and markets have closed lower with wheat leading the way lower, CBOT wheat closed around 3.5% lower amid the expanding harvest and improved prospects for needed rains across parts of the EU and Canadian wheat growing areas.
- Corn and soybeans followed wheat lower and it will now be weather (which will impact supplies) that will drive CBOT prices in the run up to the 30 June stocks and seedings report.
- One surprise came in the shape of the 5 million mt of 2014/15 corn stocks which were “found” raising stocks to the 2nd highest level on record at 197 million mt. It was in1986 when global corn stocks reached a mammoth 204.8 million mt.
- It appears that the world is heading for a record combined stockholding of wheat, corn and soybeans in 2015/16 whilst US combined stocks will be heading towards a record level too. As Chinese soybean meal prices continue to hover around eight year lows and they are making little impact in the global market it is hard to forecast higher prices unless we see a severe (and totally unexpected) drought.
- Wheat looks like a definite “sell”, and it really feels as if nearby soybeans will struggle to hold current price levels on the back of the largest US stocks in some nine years.
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