Headlines:

  • Crop values consolidate as sales data supports futures
    Wheat, corn and soya futures have all levelled in the US at the end of the week as traders take stock. This follows a sharp fall over the last week with large crop reports from the world’s major producing areas, especially last week’s WASDE upgrade to Russia’s prospects. But EU futures are still falling. Nearby CBOT wheat futures are at $4.16 per bushel, up from the contract low of $4.14¾/bu, with December values 0.5% higher at $4.42¾/bu from Thursday’s low of $4.38¾/bu. With the US winter wheat harvest complete, growers are now harvesting spring crops. Analysts say this will limit further crop damage, although yield prospects are down after the prolonged hot, dry weather in the growing season. “Grain prices will trade largely sideways in the coming weeks as wheat harvests are nearly finished and weather conditions remain favorable for upcoming northern hemisphere corn and soybean harvests,” comments analyst BMI Research.
  • South American farm recovery drives John Deere growth
    Tractor and farm and construction equipment manufacturer Deere and Company has reported rising profitability and sales from its financial year to date, and anticipates a further increase in the final quarter. South America is outperforming its other world markets as farming fortunes recover there. The business reports an 11% increase in equipment sales in the US and Canada for the latest quarter, but a 1% decline over the nine-month period. Sales for the rest of the world markets were 25% higher for the latest three months and up 17% for the first three quarters. While Deere expects full year Agriculture & Turf division sales to rise by about 9% across the whole financial year, it forecasts a 5% fall in farm equipment sales across the US and Canada markets “reflecting weakness in the livestock sector and the continuing impact of low crop prices”. This will affect both large and small equipment volumes. Agricultural sales across the EU-28 countries are predicted to be in the unchanged to 5% lower range, again attributed to low commodity prices and farm incomes. In Asia, full year sales are projected between flat and down slightly.

Summary:

Trading volume was lighter today as we head into the weekend and the Solar Eclipse set for Monday. Many across the US will have the opportunity to see a full solar eclipse that its total coverage zone running through the upper Northwest part of the country down through South Carolina. Corn managed to post positive gains of 0.75 cents. Traders were a bit more willing to buy in light of some potential bad weather and the markets have been in an oversold position. The Ukrainian Corn crop production is projected to fall 8% year over year to 25.6 million tons because of hot weather stressing the crop. Soybean futures traded 4.25 to 7.25 cents higher today. Weather continues to monitored but was able to benefit from follow through on buying from yesterday. Given the expected precipitation for the region crop conditions in Monday’s report may improve upward of 2%. Chicago Wheat futures made new contract lows intraday but managed to close slightly higher by the end of the day. Chicago Wheat ranged from 2.50 to 3.50 cent higher on the day.