Linked In
News In
Linked In

You are viewing your 1 complimentary article.

Register now to receive full access.

Already registered?

Login | Join us now

Morning markets: weather change protects crops from sell-off

Twitter Linkedin eCard

It has passed.

The date, that is, of May 15 when US


should be planted before yield potential falls. Actually, many observers swear by May 10, and others May 1.

Whatever, a good chunk of corn has not been sown within the optimal window (just how much data from the US Department of Agriculture after the close will reveal) and the chances of getting much more in over the next few days have weakened with a change in forecasts for the wetter.

The weekend brought damp notably for the eastern Corn Belt, where farmers have been particularly behind in sowings.

And "weather models shows the low that is trapped in the atmosphere over the eastern third of the US is not going to go anywhere anytime soon",

Too dry, too wet

Later in the week, a fresh low will develop over western Colorado "that will track north east into the Upper Plains into the Dakotas by Thursday", slowing spring


sowings again, besides bringing "significant/moderate rainfall to the western Corn Belt and Upper Delta", a negative for corn.

It will also bring "another round of significant heat for the portions of the lower Plains at the end of this week into the weekend with 90+ degrees Fahrenheit temperatures likely", not so good for drought-stressed winter wheat.

And the outlook isn't so bright for Europe either.

"All of the weather models have turned drier with all of France, Germany, Poland, Austria, Hungary all of Belarus and the Ukraine seeing only 25-50% of normal rainfall in the day one-to-five and in the six-to-10 day time frames," said.

Agritel said: "The weather is expected to remain dry in Europe, and most crops are now impacted to some extent, especially in France."

Overhang eroded

Add to this some freezing US temperatures over the weekend, a potential setback to seedlings, and the stage was set for a more upbeat start to the week for prices.

Chicago corn gained 1.8% to $6.94 ¼ a bushel for the July contract, now in the spot position, as of 07:20 GMT (08:20 UK time) with its wheat peer up 1.3% at $7.37 ½ a bushel.

Soybeans, which are later sown, added 0.5% to $13.35 ½ a bushel for July.

Also in crops' favour, and notably corn's, was the selldown that speculators have already undertaken over the last few weeks, meaning that the potential for further sales is only modest.

Large funds sold nearly 35,000 contracts in the week to last Tuesday, regulatory data late on Friday showed, bringing the total over the past three weeks to more than 75,000 lots.

External affairs

And it is not only agricultural commodities that have been out of favour this month, of course, with metals also sold, and notching up further small losses on Monday, against a backdrop a marginally firmer




dropped 1.4% to $98.30 in New York.

Indeed, weather appears to have separated crops from another risk-off day in external markets, with the arrest of Dominique Strauss-Kahn, the International Monetary Fund head, on sexual assault charges adding to a tendency to shift to safer assets.

Japan's Nikkei share index closed down 0.9%, with Shanghai stocks shedding 0.7%.

'Funds wounded'

"Hedge funds have been wounded over the course of the last couple weeks" in commodity market investments, Brian Henry at Benson Quinn Commodities said.

"It's likely some of these funds are having a hard time getting off the mat since the energy markets fell apart."


certainly struggled to join in Monday's rally, looking less particularly threatened by weather and, as a non-food crop, more attuned to economic sentiment.

New York's July contract gained 0.5% to 145.84 cents a pound, with the new crop December lot up 0.1% at 115.74 cents a pound.


Twitter Linkedin eCard
Related Stories

Lean hog futures tumble - but it's not all China's fault

Beijing’s threat to impose a 25% tariff on imports of US pork is hardly bullish news for hogs. But it is not the only factor explaining tumbling prices

Weekly grains and oilseed market view from Europe, March 23

Wet weather slows spring sowings... are EU grain supplies as big as data suggest?... support to wheat prices from rises in Russian values...

Morning markets: Soybean prices hold, even as China-US trade tensions grow

Still, what of rising soybean prices in China itself - where sugar import data show how import levies can affect trade? US wheat futures extend their recovery

Evening markets: Investors place pork, soybeans on front line of China-US trade war

Soybean futures underperform a lot, and lean hog futures a lot, after the US unveils plans for tariffs on $60bn of imports from China
Home | About | RSS | Commodities | Companies | Markets | Legal disclaimer | Privacy policy | Contact

Our Brands: Comtell | Feedinfo | FGInsight

© 2017 and Agrimoney are trademarks of Agrimoney Ltd
Agrimoney is part of AgriBriefing Ltd
Agrimoney Ltd is registered in England & Wales. Registered number: 09239069