Headlines:
- Cereal futures rally ahead of US plantings forum
Wheat and corn futures fell on fund selling, but a touch of profit taking in soybeans helped prices edge up from multi-week lows. “Technicals and fund selling adding pressure as record crops are harvested in South America”. There is nothing in the weather forecast to threaten those major crops, with the outlook for the all-important Brazilian safrinha corn crop remaining good. MDA Weather Services reported “no major weather concerns in South America over the next 15 days.” “Relatively dry weather has prevailed across northern Brazil over the past couple of days, which has favored soybean harvesting and safrinha corn planting,” said Kyle Tapley, at MDA. However, showers began to increase in central Brazil yesterday and will be spreading back into northern Brazil this weekend and early next week, which will slow fieldwork,” Mr Taplay said. By he added that “showers should decrease some later next week, so major delays in fieldwork are not expected”. “In Argentina, rains are still expected to become widespread in the 6-10 day period, but excessive rainfall is not expected, limiting the potential for any flooding or crop damage,” Mr Tapley said.
Summary:
Wheat producers in the US are on deck to yield their smallest crop in just over a decade. The USDA is projecting a 20% drop from last year’s crop. At this year’s annual Outlook Forum the USDA projected the Soybean crop to come in at 4.18 billion bushels which will be the 2nd largest recorded crop. They went on to forecast a Corn crop of 14.065 billion that would be the 3rd largest on record. The Wheat crop was projected at 1.837 billion bushels. Additionally, producers are projected to plant a record 88 million acres of Soybeans, 90 million acres of Corn and 46 million acres of Wheat, up 2%, down 7% and down 8% respectively versus last year.
Soybeans futures finished the day slightly higher today. Corn was pretty flat losing 1 cent and Wheat was the biggest loser giving up 5.25 cents. In South American, Argentina increased its crops estimates today which seemed to have caught traders by surprise according to reports. The concern and fear that is beginning to surround market insiders is boding well with our projections for near-term lower prices for Soybean futures. The caveat is the potential for increased demand that could work to stabilize prices.
