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Chicago Agriculture Commodities Finished Lower On the Week – Live Trading News

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Chicago Agriculture Commodities Finished Lower On the Week

$CORN, $WEAT, $SOYB

Chicago Board of Trade (CBOT) agriculture grains futures finished lower on the week, with Wheat futures dropping nearly 2%.

CBOT July Corn futures ended unchanged as lower than expected National Agricultural Statistics Service crop conditions fought against improving Central US weather.

Good or excellent ratings in the Eastern Corn Belt are down some 14-26% from last year, and current models suggest yield no better than trend in the US states of Illinois, Indiana, Oklahoma and Michigan.

It’s far too early to really correlate conditions and yield, but the trade is beginning to consider a 2017 US Corn yield of 166-168 BPA. Dryness is now forecast to extend into the latter part of June, which needs to be closely monitored.

Coming South American corn exports will weigh on US Corn exports, but rising cash Wheat prices and competitive Gulf Corn basis will offer support. The market’s focus for the next 6-8 weeks will be totally focused on weather and US Corn yield.

As for CBOT Wheat futures, winter Wheat prices are seeing a continuous decline.

Abnormal dryness and moderate drought conditions have expanded across the Dakotas, with little relief scheduled for the next 10 days, while similar concerns are noted in Ukraine and pockets of Central Europe.

All is not well with new crop Wheat growing conditions, and world cash markets reflect this.

Spot Russian FOB offers have rallied to a 15-week high and French Wheat maintains a premium to comparable US supply. The point is that this is no place to turn Bearish, and hi-pro Wheat’s premium to lesser quality will widen further if Northern Hemisphere weather patterns do not change.

Unlike recent Summers, the US just might maintain its recently found share of world trade, and a post-harvest recovery of 40-70 cents is likely.

Soybean fell to new lows in follow through technical trading early last week, but had recovered a good portion of those losses by Friday’ s close. Solid export demand along with building weather concern supported the late week recovery.

About 67% of the US Soybean crop was planted through last week, and heady gains are expected to have been scored across the Midwest. It is the eastern states of Indiana and Oklahoma that saw the most rain through the week and are expected to be slightly behind average.

Nationally, analysts maintain that 84-87% of the US Soy crop is expected to be in the ground through Sunday. Initial Soy crop ratings are not expected for at least another week, but reports from the field suggest that ratings will be down from a year ago.

With US planting winding down and crops emerging, weather take on increasing importance.

About 14%  of the estimated US Soy crop is planted in the Northern Plains where drought conditions look to worsen. A 20% yield reduction would drop MY  2017/18 US Soy stocks by 80-100-M bu.

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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