EC Weekly Review Of Agriculture Markets

Wheat

Wheat markets were lower. 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 more mixed trends but 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 ND DRY WEATHER. 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. Australia remains in good condition. 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 is coming and prices usually start to move lower soon and remain down through the harvest. Any rally at this time might not go very far and the weekly charts point to lower prices for Winter Wheat markets.

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 a seasonal rally is underway with the crops planted and nothing else going on to drive prices lower. This rally can last another week or two as the market waits to see longer range forecasts covering Corn pollination in July. 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. The rally in Oats came to an abrupt end on the release of the employment data in the US. It showed more people are working and less in need of Oatmeal at home, a good sign for the economy but a bad sign for commodities supported by a stay at home orders caused by the Coronavirus such as Oats.

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. The demand came despite the war of words between the US and China. The Chinese move to clamp down on Hong Kong dissent was going to be a big negative for the market 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. 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.

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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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