Weekly Review Of Agriculture Markets - Wednesday, June 17

Wheat

Wheat markets were lower for the week after USDA raised US production prospects and raised world ending stocks levels. The moves by USDSA pointed to tough competition down the road for US export sales. The Winter Wheat markets hold to bearish trends on the weekly charts and this is especially true for the HRW market. Spring Wheat markets show downtrends as the US and Canadian crops are getting planted and are reported to be in mostly good condition. The harvest has started in the central and southern Great Plains with variable yields reported because of freeze damage and then stress from hot and dry weather, but the yields from USDA were a little higher than expected and ay cuts to HRW production were offset by better SRW and White Wheat production. It remains dry in the western sections of the Great Plains but this will aid harvest progress now. Better rains are reported in Europe and Russia. Russia could turn hot and dry starting this week but soil moisture is good for now. Australia remains in good condition. The harvest is coming and prices usually start to move lower soon and remain down through the harvest.

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 a little lower on the weekly charts as the current seasonal rally appeared to stall. USDA made no big changes in its ending stock estimates as it cut production due to losses last year in the Dakotas but also cut demand due to less ethanol production. Many in the trade expect further cuts to ethanol demand in the coming reports. 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. The US weather and growing conditions are becoming more important as Corn enters its greatest demand time for moisture. It will be hot and dry this week in the Great Plains and Midwest, but forecasts call for more rains after that. This implies that generally, good growing conditions should continue. Continued hot and dry weather would imply yield loss potential and be a reason to see prices move sharply higher as funds and speculators, in general, are short the market. Oats gave up their rally last week and chart trends are turning down in a big way. Demand should start to back off now that many are leaving the house and are working again.

Weekly Corn Futures:

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 Weekly Oats Futures:

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Soybeans and Soybean Meal

Soybeans were higher in improved Chinese demand. China is thought to have bought more than 1.0 million tons of US Soybeans in the past week, defying the talk that it would avoid US Soybeans due to the war of words between the two countries on Hong Kong and general human rights issues. The Chinese move to clamp down on Hong Kong dissent was going to be a big negative for bilateral relations as the political situation between the US and China has deteriorated. China is looking to curb the dissent in Hong Kong over moves to bring the city more under central government control from Beijing. It is also moving against Muslims in western parts of the country. The world has objected and the US has now imposed some additional sanctions on the country. The sanctions were designed to keep trade flowing between the countries so the Chinese kept buying. 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. The US weather is considered good for growing Soybeans at this time, but traders are watching for potentially hot and dry weather for an extended period that could cut yield potential. Forecasts call for a hot and dry week this week, but rains are expected after that.

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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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