Forecasts for rainfall will also be key this week for corn market sentiment, while for oilseeds, the direction of crude will be critical, according to a report from the UK analysts.
“A spell of hot weather blasted across the US last week, risking damage to recently emerged US corn crops. The wave of hot weather reversed an increasingly bearish outlook.”
However, due to the excessive rainfall at the start of the delayed planting campaign, soil moisture across the majority of the US corn belt has been above average, and that has somewhat offset the severity of the extreme heat, said the agri-commodity market specialists.
However, corn markets will likely remain volatile over the next two months given the grain’s increasingly vulnerability to extreme dry weather, said CRM Agri.
Looking to Ukraine, analytic and information agency AKP-Inform, based in Dnipro, has added weight to the more optimistic June WASDE outlook for Ukraine corn production potential, said the analysts.
“Planted area estimates remain down significantly year on year and well below trendline expansion. However, with area estimates between 4500 to 4700Kha, production estimates at 25Mt are at the larger range of initial projections.
“Yield remains an unknown, alongside the very large uncertainty for exports, but greater supply has the potential to reduce some of the bullish European feed grain market outlook throughout next season.”
While corn markets in June have trended higher due to excessive heat, wheat prices failed to follow suit, remaining under pressure as harvest gets underway in the US, said the team.
The drought conditions in May took their toll on French wheat, with condition scores deteriorating rapidly from the start of May at 89% good and excellent to just 67% good and excellent by May 30, noted those analysts. Rainfall at the start of June, however, improved crop prospects for French wheat and the rate of decline in conditions has slowed, they reported.
“Demand for both French and German wheat next season is, however, expected to be high due to the war in Ukraine, and stock levels will remain under pressure.
“UK feed wheat demand will also be strong next season, especially from the animal feed sector due to limited corn imports, UK stocks are also likely to be tight next season.”