Lower grains start forecast with strong $
A lower start is forecast in all pits, around 5-10 in wheat and beans, 3-5 in corn. The $ is very strong this am, which is bearish for all the grains.
There are reports out of China this am that the government is once again tightening credit, asking banks to restrict lending for at least the rest of this month. This is another apparent attempt to combat perceived overheating of the economy, which could slow down Chinese commodity demand, including grains. Most commodity markets, not just grains, are substantially lower as a result this am, such as metals and energy, while Malaysian palm oil fell 46 ringgit.
One potentially bullish note this am is reports of record high corn prices in northeast China, where most Chinese corn is grown. Jilin, one of the largest Chinese corn growing provinces, suffered from drought last summer, reducing their corn crop. Prices are now 25% higher in Jilin than a year ago due to the much lower output. The official Chinese corn production estimate is 163 million tonnes but private estimates range as low as 140 million. This much lower crop could force China to import large amounts of corn for the first time in years but don't expect this to happen for several months or more, if then. This is something that could have a bullish impact on our corn market in the long term but shouldn't have any impact at all in the short term.
Argentina was generally dry the last 24 hours and more of the same is forecast today through Monday, along with hot temps. This hot and dry pattern could extend into late next week and if it does this will start stressing corn and beans so the market will watch weather developments in Argentina closely, especially after last year's severe drought sharply reduced the bean crop. Brazil remains a garden spot with widespread, frequent rains forecast to continue today in the south, today through Monday in the north. Actually, less rain would be welcome in the north so early bean harvesting could speed up.
Conditions remain very favorable in the Midwest and southwest US for the dormant winter wheat crop with no cold weather threat in sight.
There are reports out of China this am that the government is once again tightening credit, asking banks to restrict lending for at least the rest of this month. This is another apparent attempt to combat perceived overheating of the economy, which could slow down Chinese commodity demand, including grains. Most commodity markets, not just grains, are substantially lower as a result this am, such as metals and energy, while Malaysian palm oil fell 46 ringgit.
One potentially bullish note this am is reports of record high corn prices in northeast China, where most Chinese corn is grown. Jilin, one of the largest Chinese corn growing provinces, suffered from drought last summer, reducing their corn crop. Prices are now 25% higher in Jilin than a year ago due to the much lower output. The official Chinese corn production estimate is 163 million tonnes but private estimates range as low as 140 million. This much lower crop could force China to import large amounts of corn for the first time in years but don't expect this to happen for several months or more, if then. This is something that could have a bullish impact on our corn market in the long term but shouldn't have any impact at all in the short term.
Argentina was generally dry the last 24 hours and more of the same is forecast today through Monday, along with hot temps. This hot and dry pattern could extend into late next week and if it does this will start stressing corn and beans so the market will watch weather developments in Argentina closely, especially after last year's severe drought sharply reduced the bean crop. Brazil remains a garden spot with widespread, frequent rains forecast to continue today in the south, today through Monday in the north. Actually, less rain would be welcome in the north so early bean harvesting could speed up.
Conditions remain very favorable in the Midwest and southwest US for the dormant winter wheat crop with no cold weather threat in sight.
posted by InsightPublishing at
8:41 AM
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