Headlines:
- NAB warns on wheat prices – and on El Nino threat to Australian farms
Wheat prices will struggle for headway this year, National Australia Bank said, citing the potential test of an El Nino for Australian farmers, at risk of seeing a sharp drop in their next harvest. The bank downplayed the potential for a revival in wheat prices left “moribund” by a series of strong harvests, the latest of which being the “unprecedented” 35.1m-tonne Australian crop. Although there have been some modest downgrades to estimates for this year’s Black Sea harvests, following cold weather threats to autumn-planted crops, and US sowings have fallen to the lowest in more than a century “it remains unlikely that dollar prices [of wheat] will rise significantly this year”, NAB said. “The sad reality is that grain prices are for the most part disappointing. “Furthermore, we are not expecting much of an improvement over the coming year as global supply of major crops continues to track at record or near record levels.”
- corn futures rally on brisk export demand
Soybean futures came under more pressure from the rapid pace of Brazilian harvest, while corn futures were supported by good export demand. The Brazilian soybean harvest is running about 7% ahead of schedule compared to last year, with 25% now harvested. “The near-term forecast looks OK with an increasing chance of rain later this week,” said analyst Dr. Michael Cordonnier. “Generally, the soybean yields continue to be reported as very good with a few exceptions of poorer quality seed,” he said.
Summary:
The May Corn futures finished the day up 1 cent after a bumpy start post the long weekend. After being down for the 1st hour of trading, Corn found some strength once the opening rotation was done. Managed Money had been adding record net-long positions over the course of the marketing year and it seems that their appetite has yet to subside.
The USDA reported export sales of 111.2k metric tons of Corn for delivery to unknown for the current marketing year. Additionally, 138.65k metric tons of Wheat for destination to unknown was announced for the current marketing year. Last week all three markets rallied to key resistance before finishing the week on a weaker tone one Friday. Today Corn bucked the trend by closing positive where Wheat and Beans failed to accomplish the same. July Wheat was off 3.75 cents and May Beans lost 5.75 cents.
Crude Oil is of particular interest right now. It is potential approaching a critical juncture where the price action could turn from moving sideways to falling precipitously. The action that we have seen over the past several weeks speaks of a possible distribution pattern.
