Bullish factors could push grains higher
A higher to sharply higher start is likely this am, roughly 5-10 wheat, 10-15 corn and 40-50 beans. Essentially, the market is facing a repeat of last Thursday's conditions that drove prices much higher that day: a somewhat threatening weather outlook; higher crude oil and equities as well as a lower $. Prices were much higher overnight in response to this bullish combination of factors and more of the same is forecast this am.
Malaysian palm oil jumped 106 ringgit today, a supportive background influence for our bean oil market. Taiwan tenders tomorrow for up to 120,000 tonnes of US/Brazilian beans.
The four main Argentine farmers unions and the government met Friday and the government offered to lift restrictions on wheat and corn exports but said they will not lower the steep 35% bean export tax, which is what the farmers unions want most of all. The next big test between the unions and the government will be Aug 24, when the government's authority to set export taxes and other policies expires, reverting back to the Argentine Congress, which could implement changes much more to the unions liking.
The Indian monsoon is currently weak and confined to the northeast part of the country. Late this week it is expected to strengthen again but this remains to be seen. Improved weather conditions in the form of cooler temps and increased rain is forecast this week in the stressed Russian spring wheat belt as well as the Russian and Ukrainian corn belt.
The US delta will see the unwanted return of hotter and drier weather over coming days. The Midwest will continue to benefit from rain this week, up to 1.5" in the west and up to 1" in the east, all of which will be welcome. The 6-10 day calls for warmer temps and below normal rain. If this only lasts for a few days, it will be beneficial as it will help speed up development of the crops. However, the market fears this could signal a longer period of hotter and drier weather, which would be bullish. Up until now, we have had virtually perfect weather in the Midwest, which the market has discounted. If the weather doesn't remain "perfect", this change will be quickly reflected by a rally. ---Vic Lespinasse
Malaysian palm oil jumped 106 ringgit today, a supportive background influence for our bean oil market. Taiwan tenders tomorrow for up to 120,000 tonnes of US/Brazilian beans.
The four main Argentine farmers unions and the government met Friday and the government offered to lift restrictions on wheat and corn exports but said they will not lower the steep 35% bean export tax, which is what the farmers unions want most of all. The next big test between the unions and the government will be Aug 24, when the government's authority to set export taxes and other policies expires, reverting back to the Argentine Congress, which could implement changes much more to the unions liking.
The Indian monsoon is currently weak and confined to the northeast part of the country. Late this week it is expected to strengthen again but this remains to be seen. Improved weather conditions in the form of cooler temps and increased rain is forecast this week in the stressed Russian spring wheat belt as well as the Russian and Ukrainian corn belt.
The US delta will see the unwanted return of hotter and drier weather over coming days. The Midwest will continue to benefit from rain this week, up to 1.5" in the west and up to 1" in the east, all of which will be welcome. The 6-10 day calls for warmer temps and below normal rain. If this only lasts for a few days, it will be beneficial as it will help speed up development of the crops. However, the market fears this could signal a longer period of hotter and drier weather, which would be bullish. Up until now, we have had virtually perfect weather in the Midwest, which the market has discounted. If the weather doesn't remain "perfect", this change will be quickly reflected by a rally. ---Vic Lespinasse
posted by InsightPublishing at
10:30 AM
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