Lower Grains Start Expected
A lower start is expected this am, around 3-5 in wheat and corn, 5-8 in beans. Crude oil and the equity markets are higher this am but so is the $, sending mixed signals to the grains. Funds keep piling back into the grains in a big way swelling open interest across the floor: 9000 higher in wheat yesterday, 10,000 in corn, 7000 in beans, 5000 in meal and 6000 in oil, for example.
The China National Grain and Oils Information Center, a government-linked think tank, is reporting Chinese crushers are now operating at a loss due to sharply higher imported bean prices.
The US Climate Prediction Center, a division of the National Oceanic and Atmospheric Administration, is saying an El Nino weather pattern could develop within weeks and persist from June through August. This could cause a drought in Australian wheat areas and disrupt normal weather around the world. Abnormal weather is almost always bullish for grain prices as it cuts grain production. Earlier this week,the Australian Bureau of Meteorology warned there is a better than 50% chance for an El Nino developing, if present weather patterns continue.
Goldman Sachs will start spreading their long positions in Jul wheat, corn, beans and oil forward today into deferred months, which could put some pressure on Jul. This process will finish on Thursday next week.
Informa is expected to put out crop guesses at 10:30am US Central time today ahead of the USDA report next Wednesday. Trade averages for the USDA report should start coming out later today.
Technicals: The wheat chart still looks bearish to me but the other charts all look bullish again. If the market continues reversing direction as it has done the last two days, trend followers like me look for the market to resume trending so that we will do well again.
Rain continues on the light side in major Chinese corn and bean areas and IF this pattern continues it will become a very bullish influence on US grain prices. Argentine wheat areas are forecast to remain dry the next week or so, further stressing the crop.
The US northern plains spring wheat belt will see up to 1.5" unwelcome weekend rain. The 6-10 day calls for wet weather also, which will keep late planting slow. The Midwest will see weekend rain, especially in the north, delaying late planting efforts in the east. The 6-10 day calls for more wet weather. ---Vic Lespinasse
The China National Grain and Oils Information Center, a government-linked think tank, is reporting Chinese crushers are now operating at a loss due to sharply higher imported bean prices.
The US Climate Prediction Center, a division of the National Oceanic and Atmospheric Administration, is saying an El Nino weather pattern could develop within weeks and persist from June through August. This could cause a drought in Australian wheat areas and disrupt normal weather around the world. Abnormal weather is almost always bullish for grain prices as it cuts grain production. Earlier this week,the Australian Bureau of Meteorology warned there is a better than 50% chance for an El Nino developing, if present weather patterns continue.
Goldman Sachs will start spreading their long positions in Jul wheat, corn, beans and oil forward today into deferred months, which could put some pressure on Jul. This process will finish on Thursday next week.
Informa is expected to put out crop guesses at 10:30am US Central time today ahead of the USDA report next Wednesday. Trade averages for the USDA report should start coming out later today.
Technicals: The wheat chart still looks bearish to me but the other charts all look bullish again. If the market continues reversing direction as it has done the last two days, trend followers like me look for the market to resume trending so that we will do well again.
Rain continues on the light side in major Chinese corn and bean areas and IF this pattern continues it will become a very bullish influence on US grain prices. Argentine wheat areas are forecast to remain dry the next week or so, further stressing the crop.
The US northern plains spring wheat belt will see up to 1.5" unwelcome weekend rain. The 6-10 day calls for wet weather also, which will keep late planting slow. The Midwest will see weekend rain, especially in the north, delaying late planting efforts in the east. The 6-10 day calls for more wet weather. ---Vic Lespinasse
posted by InsightPublishing at
10:30 AM
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