Will USDA Deliver Silver Bullet for Ag Markets Friday?
The grain markets continue to look for something to change the direction of June’s dismal trading pattern. Will it come on the last trading day of the month? On Friday, the USDA will update its 2018 estimates on U.S. acreage and U.S. Quarterly Grain Stocks. Both reports will be released at 11 a.m. CT. The trade sees the acreage data as the most market impacting. Historically, USDA has raised its June corn acreage from its March estimate in each of the last two years and in five of the last seven years.
Sucden Financial turns ‘neutral to slightly optimistic’ on sugar futures – even as prices tumble
Sucden Financial, flagging deteriorating prospects for Brazilian sugar output, revealed that it was “neutral to optimistic” on price prospects for the sweetener, even as futures tumbled anew. The commodities trader said that the “floor” of the sugar market, which touched a two-year low of 10.69 cents a pound in April, “is rising”, with prices since staging, and holding, a recovery. Even after a 3.3% tumble on Wednesday, the spot July contract remained more than 1 cent higher, at 11.72 cents a pound. The day’s fall was attributed largely to a 1.4% decline in the Brazilian real against the dollar, cutting the value in dollar terms of assets, such as sugar, in which the South American country is a major player. Still, Sucden flagged that funds and speculators may “have limited appetite to sell short” in sugar, thanks to factors such as the threat from dryness to the cane harvest in Brazil’s Centre South region, which is responsible for some 90% of domestic production.
Summary:
Rally fades in Corn and Soybeans, but Wheat held its. The Corn market was nominally higher today it tried to find some follow through strength from yesterday. Traders are perhaps starting to take notice of the warm weather in the extended forecasts. Trade war concerns continue to be a limiting factor in the upside potential. The market remains in an oversold position with our Stochastic Indicator. Soybean prices were stronger again overnight but was not able to maintain that strength through the regular session. Trade concerns in the midst of a US/China trade war continues to pressure Soybeans. It was mixed in trading on the day. The Chinese Academy of Agricultural Sciences, a Chinese government think tank, released a report this morning saying “To resolve the trade dispute via negotiation is still a win-win move.” Going on to say the bilateral tariffs, if implemented, could reduce total US farm exports to China by 40%. The Winter Wheat market saw support that stemmed from some intermarket spreading and perhaps some profit taking during the regular session. Some rolling pressure was seen in the July Chicago contract as it traded nearly a dime higher while the deferred contracts were up less than five cents.
