- An emotional/fear packed morning of Chicago trade with speculators piling into fresh market length as they ponder whether hot Midwest temps this weekend could be the start of the La Niña drought? A slew of private forecasters are using ENSO analogs to forecast a 2016 Midwest drought, speculators understand that it’s time for a real weather market to begin. Whether such thinking is correct has yet to be determined, but there is no evidence that a “dome of doom” is prepared to settle across the Central US in June. The coming heat/dryness this week appears to be a rather normal interlude to the start of summer. New crop corn and soybeans scored new rally highs, while wheat followed on massive fund short covering.
- There appears to be little evidence of any massive flooding or ponding of fields outside of those that abut major tributaries like the Seine River. Most of the European flood damage to crops is modest and at this time we are not looking for a substantial cut in yields. However, the recent cool/wet weather has pushed back the wheat harvest to early to mid July. This means that wheat quality issues will be resolved in the next 3-4 weeks. Amid saturated soils, there could be a larger share of French/German wheat that is now degraded to feed quality. The French/German weather forecast is improved for the flooded areas this week with sunshine/warmth. However, the forecast models have the rains returning next week to the Paris Basin. Sunny, warm and dry weather is now desired for EU and Russian winter wheat crops into harvest.
- Brazilian and Argentine farmers are becoming much more active sellers of newly harvested cash corn with prices at record highs. The corn harvest is starting to more actively advance with some cutting the corn at high test weights to quickly meet market demand. The Argentine soybean harvest should reach at least 85% completed this week with yields holding steady.
- It is all about weather in the US at present, and a week of warm/dry weather during June favors (not harms) crop yields – if the rain returns as forecast.