Chicago Agriculture Commodities Finished Higher

Chicago Agriculture Commodities Finished Higher

Chicago Agriculture Commodities Finished Higher

$CORN, $WEAT, $SOY

Chicago Board of Trade (CBOT) agriculture commodities finished higher on the week which ended 27 July, with Wheat futures   up nearly 3% supported by concerns about crop shortfalls in key production areas around the globe.

The most active Corn contract for December delivery rose 7.25c weekly, or 1.96%, to 3.7625 bu.

September Wheat delivery surged 14.5c, or 2.81%, to 5.305 bu.

November Soybean added 20.5c, or 2.05%, to 8.8525 bu on the week.

CBOT Corn futures rallied 7.25c on the week. The market has largely been following wheat, but major exporter Corn supply and demand is historically tight. Most importantly, a new record US yield will only marginally change global stocks and use.

Argentina will compete with the US for expect demand in the next 45 days or so. However, there’s little doubt the USDepartment of Agriculture (USDA)’s US export forecast is 150-300-M bu low. This will offset any US yield gain.

Close attention will be paid to Pro Farmer’s annual crop tour in mid-August following disappointing spring Wheat yields, despite high crop ratings. And like wheat, the world needs 7-8-M more corn acres in MY 2019/20 to prevent further declines in world exporter stocks. Seasonal lows have been marked in CBOT Corn.

US Wheat futures ended the week sharply higher, led by European markets and Spring Wheat futures in the United States. The Northern Hemisphere harvest has turned out worse than expected and with additional cuts made to crops in North Europe this week, the world exporter balance sheet is tightening.

And Ukrainian yields are running below USDA’s July forecast. Spring Wheat yields in the US were capped by early and mid-Summer heat. Canadian harvest estimates are declining. And crippling drought continues across the East Australia.

Soybean futures rallied over 20c on the week, and November delivery price is now 60c above it’s early July low. Agriculture analysts fully expects these lows to hold on record large US demand.

But unlike the grains, Soybean outlook remains rigidly Neutral.

Europe stated this week it aims to buy more US Soybeans in MY 2018/19 in order for US tariffs on EU goods to be eased. Agriculture traders note that Europe already was going to buy Soybeans exclusively from the US due to steep discounts to South American beans.

US weather needs to be monitored with pockets of new dryness emerging and heat projected to return to the Central US August weather will determine US Soybean yields

Have a terrific week

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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