Ag commodity markets driven by weather forecasts once more

07-Jul-2020 - Last updated on 07-Jul-2020 at 13:59 GMT

Related tags Wheat Corn soy exports China

Weather forecasts are showing hot temperatures and limited rainfall for the week ahead in much of the US corn belt, said UK based ag market analysts, CRM AgriCommodities.

US corn prices found support yesterday as confidence builds in weather forecast models for a prolonged dry period across the corn belt, according to the latest CRM market review.

“A dry period during the silking phase has the potential for yield curbs.”

Also lending support to US corn [maize] yesterday were export sales data, said CRM. Some 204KT of corn for delivery to China was announced for the 2020/2021 marketing year along with 182.8KT of corn for delivery to Mexico.

The condition of corn in France remains favorable, with 83% of the crop remaining in good and excellent condition, noted the team.

Wheat outlook

In terms of the outlook for wheat, initial yields have been disappointing in Russia, reported CRM.

Consultancy firm, SovEcon, has just downgraded its forecast for Russia's 2020 wheat crop to 80.9MT from 82.7MT, it noted.

The harvest of cereals across Europe is now also well underway, said the UK team. The French wheat harvest has now reached 4%, with condition maintained, they added.

Looking at the oilseeds picture, CRM says that a factor lending support to US soybeans, alongside weather concerns, is again export sales, with some 264KT of soybeans purchased by China during the 2019/2020 marketing year.

Crude oil prices are gaining support as global equity markets have climbed and markets look for positive economic data, said the ag market specialists.

Covid-19 linked uncertainty

However, CRM notes continued uncertainty from the Covid-19 pandemic, with the World Health Organization (WHO) saying its member nations reported over 212,000 new COVID-19 cases on Saturday, the highest single-day total and increase since the start of the pandemic.

The UN health agency said more than half of the new confirmed infections were reported in Brazil and the US - the two countries that also have the highest COVID-19 death tolls in the world.

The US reported more than 50,000 new confirmed cases nationwide on Saturday, while Brazil recorded nearly 38,000 new infections and 1,091 deaths.