Headlines:
- USDA ACREAGE REPORT IS SCHEDULED FOR JUNE 30TH
- FIRST NOTICE DAY FOR JULY GRAIN AND OILSEED FUTURES IS THURSDAY, JUNE 30TH
- SUPPLY SQUEEZE SENDS BRAZILIAN SOYBEAN PRICES SOARING
BRAZILIAN SOYBEAN PRICES ARE SOARING, AFTER MONTHS OF HEAVY EXPORTS DRAINED THE COUNTRY‘S STOCKS, AND WITH THE HARVEST THAT NOW LOOKING SET TO END UP CONSIDERABLY SMALLER THAN HAD BEEN EXPECTED. SOYBEAN PRICES REACHED AN ALL–TIME HIGH IN LOCAL CURRENCY TERMS THIS WEEK, SPARKING FEARS THAT THE COUNTRY IS GOING TO SEE A SHARP SUPPLY SQUEEZE. THE DYNAMICS ECHO THOSE WHICH HAVE SENT BRAZILIAN CORN VALUES SOARING IN RECENT WEEKS. “SOYBEAN EXPORTS HAVE BEEN LEAVING BRAZIL AT A RECORD PACE THE LAST FEW MONTHS WHILE AT THE SAME TIME THAT THE SOYBEAN CROP HAS BEEN GETTING SMALLER,” SAID ANALYST DR. MICHAEL CORDONNIER. BRAZIL‘S CEPEA THINK–TANK CITED “THE SHARP DROP IN PRODUCTION IN ARGENTINA AND THE CONSEQUENT LOWER GRAIN PROCESSING IN THAT COUNTRY,” PUSHING UP EXPORT DEMAND IN BRAZIL AND THE US.
Summary:
Volatility may rule the roost for the next several weeks. Grain and Soybean futures were energized midday today responding to weather forecasts calling for more hot & dry weather in the Midwest amidst indications of increasing demand. Heat wave advisories have been issued parts of eastern Oklahoma and southern Kansas. Forecasted heat indexes are projected to reach as high as 115°F. About 75-76% of both the US Corn and Soybean crops were rated good or excellent as of Sunday but concern is growing that production will decline. We will look to see if there are any adjustments to the USDA’s Crop Progress Report scheduled for release on Monday.
Even with some of the export sales data proved was bullish yesterday the markets did not respond in kind until potential detrimental weather implications came into play.
Corn futures traded sideways to up this week as projected early in the week and even after a big gain today, Soybeans moved down for the week as we expected. Additional reports are surfacing suggesting that weak La Niña conditions will develop by midsummer that continue through fall or even early next year. The transition from El Nino to La Nina is poised to cause risks of dryness in July and August.
July Corn was up 12.50 and December Corn was up 13 cents today. The big moves for both contracts essentially s locked in a positive weekly gain for the contracts finishing up 13 and 16 cents respectively. July and November Beans we up big today up 25 and 28 cents but that was not enough to push the weekly move net positive. They lost 18.75 and 15.50 respectively. July Wheat finished the day up 8.25 cents but was down 14.25 cents for the week.
