CHICAGO, June 17 (Xinhua) — Chicago Board of Trade (CBOT) grains futures closed mixed over the trade week which ended on June 16, as unstable weather conditions still weigh on crop prices.
July corn fell 4 cents on back and forth weather forecasts, and as some moisture relief impacted the Northern and Eastern Corn Belt late in the week. Crop conditions at 67 percent Good or Excellent by rating are decent, and argue for a yield near trend.
Analysts’ concern is the early season heat and the lack of a lasting wet pattern forecast into July. Despite the recent rainfall, soil moisture deficits remain, and are becoming severe across the Plains and Western Corn Belt.
Like wheat, demand news is lacking and South American corn offers are historically cheap. But analysts from AgResource company best guess on U.S. national yield today rests at 165-167 U.S. dollars per bushel.
Wheat futures soared to gains of 20-33 cents, once again led by spring wheat contracts in Minneapolis. Decent rain fell across the Dakotas this last week, but drought and severe moisture deficits persist.
And with 60-70 percent of the wheat crop in the heading stage in South Dakota, new rainfall will only have so much benefit.
AgResource’s work suggests the U.S. will have to ration its available supply of high protein wheat, particularly as protein in the Southern Plains remains disappointing.
A meaningful demand driver is absent, but major exporter production estimates are in retreat. Russian wheat, the world’s cheapest milling origin, is offered at 4.50 dollars per bushel. The downside price risk is limited to 10-15 cents.
Soybean futures saw a quieter week of trade, with neither rallies nor breaks able to get much traction. At the week’s close, July beans were down just 2.5 cents.
Better than expected rains across the Midwest limited gains through the week, while a larger than expected May soybean crush offered support.
Based on the preliminary demand data, the United States Department of Agriculture is expected to lower the old crop crush estimate, but likely to increase exports in the July World Agricultural Supply and Demand Estimates report.
However, old crop stocks are historically large. Funds still hold a significant net short soybean position, but began to cover a portion of it last week.