Headlines:

  • Strat Grains cuts hopes for EU wheat, barley harvests
    The process of putting numbers on Europe’s crop production losses to cold and dry weather began in earnest as Strategie Grains cuts its grains harvest forecasts, with German prospects getting a separate downgrade by the DRV too. Strategie Grains cut its forecasts for the European Union harvests of all major grains, after marked frosts in major growing countries such as France, Germany and Poland in April, when winter crops, having emerged from dormancy, are more vulnerable to cold temperatures. Dryness too had curtailed yield prospects in France, the UK and Belgium, while proving a significant setback in Spain. The influential analysis group cut its estimate for the overall EU grains harvest by 3.6m tonnes to 301.6m tonnes, which would still represent a rise of 4.5m tonnes year on year, but take it further behind 2015’s bumper 309.8m-tonne crop.

 

Summary:

Soybeans and grain collapsed in overnight trading and for much of the day after the value of the Brazilian currency (the Real) fell under the pressure of a Brazilian presidential scandal. Allegations that the country’s leader was involved in a cover up scheme involving a former speaker of the house in Congress. Brazilian President Temer was caught on tape taking bribes. A weakened Real makes Brazilian products more attractive to overseas buyers which may mean fewer export opportunities for US goods. Additionally, the Brazilian Minister of Agriculture and the Mexican Secretary of Agriculture organized a series of meetings last week in Sao Paulo between Brazilian and Mexican businesses involved in the international grain trade. The Mexican delegation is looking into diversifying its sources of Rice, Corn and Soybeans. Nearly all of Brazil’s Corn exports come from the Safrinha Corn production which will be harvested from June through August. Brazil’s Corn exports usually start in August and build throughout the fall. Brazilian Corn prices are expected to decline when their harvest begins. Brazilian Corn could prove to compete with US Corn going into Mexico. Wheat futures were mixed with July settling down 2 ticks and September and December adding 1 tick. Soybean was the biggest loser of the day. The July contract fell 31.25 cents, while Corn shed 5.75 cents.