Evaluating US wheat prospects, first off, UK specialists, CRM Agri analysts note that ongoing dryness remains a concern, alongside a return of freezing temperatures in the US.
Chicago corn futures surpassed the US$6 per bushel level for the first time in eight years this week as worries over the cold snap in the US provided additional support, alongside the dry conditions for the Brazilian Safrinha (second corn) crop, said the analysts.
The most recent USDA WASDE provided limited market impactful information, according to CRM Agri, with only marginal revisions to global stocks. China was the only region of major changes, with increased wheat consumption forecasts while corn remains expensive in animal feed rations.
Giving us a deeper dive on those developments, Peter Collier, market analyst at CRM Agri, said significant current watch factors and areas of concern center around the weather and lack of precipitation. “We are firmly in a spring weather market.”
Lack of precipitation for northern US states and key spring planting regions in Canada are also becoming an issue, said Collier. “Rainfall is needed for spring wheat, although there is still plenty of time for spring planting.”
He said Brazilian dryness is creating challenges for the Safrina crop, with yield estimates now below last year due to late planting.
“Although the Safrina second corn area is larger this year due to high price incentives, the falling yield projections are supporting global feed grain markets.”
The Mato Grosso Institute of Agricultural Economics (Imea) reduced its yield estimate for the Safrinha corn crop yields, forecasting a decline of 3.56% in yield compared to the 2019/20 crop due to those ongoing dry conditions and the late planting.
Meanwhile, in terms of soybean developments, the CRM Agri team noted weekly US net sales of just 90.4KT for 2020/2021, down noticeably from the previous week and down 14% from the prior four-week average. Although, given the already fast export pace and small stock projections, a slowing of sales is expected, they said.