Headlines:

  • The Brazilian Senate voted to indict President Rousseff who is currently suspended from office
  • Soybean futures fall back, as bullish news dries up
    Corn and wheat rallied as traders squared positions ahead of Friday’s monthly WASDE report from the US Department of Agriculture, which is expected to show cuts in European production prospects. But soybean futures turned lower, with no fresh demand news to help markets overlook the size of the US crop. Energy markets turned bearish later in the session, thanks to some bigger than expected US stocks numbers. Brent crude oil futures fell by some 3%, after the US Energy Information Administration reported that US crude inventories rose by 1.1m barrels in the week ended August 5, where analysts expected a 1.0 million-barrel fall. Brent crude futures were down 2.1%, at $44.03 a barrel, as Chicago markets closed.
  • US land prices ‘to extend decline into 2017’
    US farmland prices will extend their decline into 2017 – but the extent of the drop will depend on enthusiasm for raising interest rates, the University of Illinois said, after official data showed the first drop in values for seven years.

Summary:

The floods in France weeks ago was only the beginning of potential issues for the European Wheat crops. According to forecasters, recent heavy rainfall in other countries such as Poland, Germany and Lithuania looks to hinder the collection of Wheat crops and even degrade crop quality. These European concerns are coinciding with short covering in the US Wheat markets causing a bit of support for Wheat. We recently reported that the September contract had good support at the 405 level and to expect some strength above and weakness below it. Today Wheat close at 420.50 up 3.50 cents but was well off the intraday high of 427.50.

The 10 day forecast calling for beneficial rain across the Midwest put a halt to the 5 day session gain streak that Soybeans had been enjoying. September Beans lost 7.25 cents and November Beans gave up 6 cents. There had been what appeared to be an uptick in demand for Beans but the USDA reported that importers purchased Corn instead of Beans today. With that new Corn finished flat with the September contract adding just a tick and the November contract adding two ticks.

Overall market volatility is still a bit muted ahead of Friday’s USDA WASDE report.

PMW 10 Aug 2016[1]