Weekly Ag Markets Update

Wheat: Wheat markets finished the week higher, especially in Chicago HRW and Minneapolis Spring Wheat markets. It was a week of mixed weather news as Russia got good rains in just about all areas but parts of Europe and the western Great Plains of the US stayed dry. The weather is also good in Australia and has been good for planting in Argentina although Argentina has also been drier than normal. Frequent showers are being reported in most of Australia. The big weather feature is the dry weather in Europe and the US and this dry weather has been supporting world prices and futures price action. Competition for sales is expected to be tough even with less in the US and Europe as Australia is coming back after years of drought and as Russia has better weather and improved production prospects. The harvest, small or big, is coming and prices usually start to move lower soon and remain down through the harvest. Any rally at this time might not go much farther.

Weekly Chicago Soft Red Winter Wheat Futures:

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Weekly Chicago Hard Red Winter Wheat Futures:

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Weekly Minneapolis Hard Red Spring Wheat Futures:

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Corn: Corn was higher on what appeared to be fund short covering. There did not appear to be much in the fundamentals to trigger the move, but demand is slowly improving for Corn. Meats processors are back and are aiming to restore 80% to 85% of capacity kill rates in their plants. The backlog of Cattle and Hogs will slowly disappear under this scenario and meats wholesale and retail prices will fall. This will take some time, but it is starting to come to pass. Ethanol demand is also improving as lockdown orders are lifter in most states and in Europe. Demand for gasoline and ethanol has gotten a little stronger and should continue to improve over time. All this still implies that ending stocks for Corn as projected by USDA can increase, but the increase should not be as great as originally thought. Export demand is becoming more difficult with US prices quoted above those in Argentina and Ukraine. Corn can rally a little more before the current seasonal rally runs out of steam as the funds still hold a significant short position and as farmers are scale up selling into the rally.

Weekly Corn Futures:  

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 Weekly Oats Futures:

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Soybeans and Soybean Meal: Soybeans were a little higher on hopes for improved Chinese demand. These hopes got hurt a bit with the Chinese moves to clamp down on Hong Kong. China is looking to curb the dissent in Hong Kong over moves to bring the city more under central government control from Beijing. The world has objected and the US has now imposed some additional sanctions on the country. The sanctions seem designed to keep trade flowing between the countries so the market can feel some relief from that but the Chinese will probably retaliate with moves of its own and these could involve some trade. China has remained a very active buyer in South America even as it has increased Soybeans buying here in the US, so the overall amount taken from the US might not match the hopes of the trade. Brazil prices have been creeping higher for the rest of the world as it starts to run out of Soybeans to export, so China and the rest of the world will look to the US and Argentina for additional supplies.

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Disclaimer: Past results are not necessarily indicative of future results. Investing in futures can involve substantial risk of loss & is not suitable for everyone. Trading foreign exchange also ...

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