- Soybean futures bounced higher on short covering in a day of firmer day that left products higher too. Heavy rains in Argentina have triggered concerns similar to last year’s rain related crop losses. We are advised that, at most, the recent rains will delay harvest, but have not yet reduced crop size. However, it is fair tom say that dry weather is now needed.
- Corn in Chicago traded in a narrow range, ending slightly higher with the May ’17 contract firmly entrenched between its 20 and 50 day moving averages as fresh news remains lacking although the return of China and higher soybean meal and corn futures there added some support. The US weather forecast is offering a decent planting window to the C Plains in the coming ten day period, and a warmer temperature profile looks to last into month end.
- Chicago wheat followed global cash prices higher. Snow cover has eroded completely across the US N Plains and S Canada, and the forecast lacks excessive precipitation across the Dakotas in the next ten days. Informa Economics has estimated 2017 US winter wheat production at 1,285 million bu, down 387 million from last year and the lowest since 2002, which generally reflects normal abandonment and trend yield. It is demand that will determine whether US end stocks rise or fall in the next crop year. The EU/Black Sea weather forecast is a bit wetter beyond the next 6-7 days, but until this pattern change is pulled into the nearby period confidence is low, and better rain will certainly be needed across W Europe, where in Spain, France and the UK 30-day precipitation rests at just 50-60% of normal. A crop problem is needed to justify lasting rallies.