Mixed grains start indicated
A mixed start is indicated this am, about 2 better wheat, steady corn and 1 lower beans. The $ is lower while crude oil and gold are higher, which could bring some support to all the grains. There isn't a lot of fresh market moving news so far this am but the main background features remain in place and they are mostly bearish: decreasing demand, at least in the case of beans, as China switches or is about to switch most of their bean buying from US to South American origin; and increasing supplies with continued mostly favorable weather increasing crop prospects in South America.
Additional pressure has come from the recent sell off in the value of the Brazilian currency, the Real. Just as a weak US $ increases US grain export competitiveness vs other countries, so does a weaker Real increase Brazilian grain export competitiveness. Brazil is a huge exporter of corn and beans but an importer of wheat.
On the bullish side, grains are oversold and overdue for a significant technical bounce but all efforts so far to do this have failed. Mar beans, for example, fell around $1.35 a bushel last month and all recovery attempts so far have been weak. Eventually we will see a more robust technical rally but I think it is better to wait until it is actually underway than to try and anticipate it ahead of time.
Southern Brazil was mostly dry over the weekend and more of the same is forecast this week, along with hotter temps. Northern Brazil had scattered weekend rain and more is predicted today before hot and dry weather moves into the region Tue-Fri. Brazil has had so much rain a period of hot and dry weather should be readily tolerated by the well watered crops. Argentina had up to 1.5" of welcome weekend rain in parts of Cordoba and Buenos Aires provinces with up to .7" in parts of Santa Fe province. Temps were cooler over the weekend also after very hot and dry weather most of last week. More welcome rain is forecast all this week. The Argentine provinces named above are the largest grain producing provinces in the country so rain there will keep the outlook for very large crops in good shape.
No winter kill or extreme cold weather threat is forecast for the US southwest or Midwest winter wheat belts.
Additional pressure has come from the recent sell off in the value of the Brazilian currency, the Real. Just as a weak US $ increases US grain export competitiveness vs other countries, so does a weaker Real increase Brazilian grain export competitiveness. Brazil is a huge exporter of corn and beans but an importer of wheat.
On the bullish side, grains are oversold and overdue for a significant technical bounce but all efforts so far to do this have failed. Mar beans, for example, fell around $1.35 a bushel last month and all recovery attempts so far have been weak. Eventually we will see a more robust technical rally but I think it is better to wait until it is actually underway than to try and anticipate it ahead of time.
Southern Brazil was mostly dry over the weekend and more of the same is forecast this week, along with hotter temps. Northern Brazil had scattered weekend rain and more is predicted today before hot and dry weather moves into the region Tue-Fri. Brazil has had so much rain a period of hot and dry weather should be readily tolerated by the well watered crops. Argentina had up to 1.5" of welcome weekend rain in parts of Cordoba and Buenos Aires provinces with up to .7" in parts of Santa Fe province. Temps were cooler over the weekend also after very hot and dry weather most of last week. More welcome rain is forecast all this week. The Argentine provinces named above are the largest grain producing provinces in the country so rain there will keep the outlook for very large crops in good shape.
No winter kill or extreme cold weather threat is forecast for the US southwest or Midwest winter wheat belts.
posted by InsightPublishing at
8:42 AM
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