The Chicago-based research firm AgResource noted that the agricultural future of CBOT was flat as the agricultural market reacted to the rapid expansion of consumer demand.
Fallen U.S. AgResource is positive for the agricultural futures amid dollar and strong consumer demand, suggesting that any early weekly correction offers a new buying opportunity.
Spot CPOD corn futures fell to a new 30-day low just before the end of the week flat. Fluctuation seen in the last 10 days is a template for summer. Even broader price changes are possible as the market digests weekly weather in August.
AgResource’s view is that the positive of corn, especially at intervals, is that of normal U.S. Consumption is higher than production in the middle of the Midwest. As demand from China is substantial, a demand-led bull trend remains the same despite the recent downturn.
Regional weather issues will attract serious attention in June. Climate models throughout the Central U.S. and the Black Sea are consistently warmer in June-July. Brazil’s crop shortages are expanding U.S. gasoline use as it registers export demand for the United States. There are signs of an increase in corn consumption rates.
AgResource bets that this week’s growing-season declines hit. Weather forecasts for the Northern Plains and the North Central West will be important next week.
U.S. Wheat Future Minneapolis is up 26 cents as drought returns to the Northern Plains and Canada, reducing the week mixed with winter wheat futures to harvest looms.
AgResource’s long-term study shows that global demand is expanding and exporter stocks/utilities are tightening even under normal weather conditions. The positive view of wheat is not based on supply, but rather on-demand and low carry-on stocks.
There are distribution risks. Drought is a concern in areas where North American spring wheat is produced. Black Sea plants are worse than expected. The exceptional heat throughout Siberia and Kazakhstan should be closely watched.
Soybeans were under basic pressure, but found market support and rallied more than a week ago. The U.S. across the Midwest. Soybean bases have fallen sharply over the past two weeks. The question is whether the market will move forward and supply will be available for harvest from July. Crushers have only their feed gravity requirements.
Under the Department of Agriculture (USDA) About 75% of the soybean crop was planted and 41% was exposed last week by the National Agricultural Statistics Service (NAS). AgResource expects 65-69 percent of the crop to be exposed. Crop level estimates will begin next week.
Demand for Brazilian soybeans is so high that China will soon be able to meet the U.S. demand. Possibility to start a purchase plan. The USDA balance runs on a razor-thin edge, leaving no room for yield or acre fall.