Headlines:
- Corn, soybean futures rally on dryness fears in Argentina
Corn futures soared on weather concerns in South America, while soybean futures rallied, on stronger export prospects. Weekly US corn export inspections were reported at a strong 1.15mt tonnes, up from 829,000 tonnes last week. In Argentina, there seems to be no quick end to dryness fears threatening corn and soybeans in the country’s agricultural heartland. “The showers in Buenos Aires today may lead to minor improvements in soil moisture, but dryness is likely to linger,” said Kyle Tapley, at MDA Weather Services. And in other parts of the grain belt, “mostly dry weather over the next 10 day s should allow dryness to increase,” Mr Tapley said.
- Australian government unveils huge upgrade to wheat harvest hopes
The Australian agriculture ministry unveiled a huge upgrade to its domestic wheat crop forecast, citing favorable weather, including good moisture and a mostly mild spring. Abares, the ag-ministry’s research arm, forecast Australian wheat production at a record 32.6m tonnes, up 35% year on year. In September Abares forecast the wheat crop at just 28.1m tonnes. And the body downplayed both frosts in Western Australia, and quality issues in the east, two issues which have raised concern this season.
- Sugar futures hit five-month-low, on ideas of looser market
Sugar futures broke their lowest level in over five months, as funds abandon ship and the fundamental picture gets less supportive.
Broker INTL FCStone on Monday cut its projection for the global sugar deficit, the extent to which supply falls short of demand, to 7.5m tonnes for the 2016-17 crop year, down 2.2m tonnes from its previous estimate. FCStone is the latest industry watcher to downgrade its idea of this season’s deficit. Last month the International Sugar Organization trimmed its forecast for the 2016-17 deficit by 860,000 tonnes, to 6.19m tonnes. And Green Pool Commodity Specialists saw the deficit at 5.28m tonnes, down 520,000 tonnes from its previous estimate.
Summary:
Soybean futures staged a large upside reversal today on the heels of hedge funds increase of net long Soybean positions. Weather in Argentina may play a big role in the success of those bets. Not only did they increase net long position in Beans. Managed Money were aggressive in lifting its net long positions in 13 of the top US traded agricultural commodities according to the most recent commitment of traders report. In recent reports analysts claim that Managed Money just keeps buying more and more Beans. The result today was a big advance of 15.75 in March Beans. Corn was not to be left behind. It had a huge run of its own of 11 cent doubling the percentage gain of Beans. Better than expected export inspection results also helped to lift price higher today coming in at 1.150 MMT vs 0.829 MMT last week. Soybean export inspections did not beat previous week’s results but were still higher than expectations coming in at 1.910 MMT. Wheat export inspection numbers were pretty good coming in at 0.454 MMT almost doubling the previous week’s number of 0.245 MMT. It was a positive day for the grains cross the board. Follow through the next couple of days will be is probable.
