MarketsFarm — After hot and dry weather sent corn and soybean prices climbing higher in early June, much-needed rains brought bids down at the Chicago Board of Trade on Wednesday.
Weather accounted for “90 per cent” of the pricing influence, according to Sean Lusk, vice-president of the commercial hedging division for Walsh Trading in Chicago.
“I think you get some rain where it’s been needed, maybe more is forecasted, but at the end of the day, the balance sheet is the balance sheet,” he said.
Read Also
Alberta crop conditions improve: report
Varied precipitation and warm temperatures were generally beneficial for crop development across Alberta during the week ended July 8, according to the latest provincial crop report released July 11.
Weather-related issues in South America and lower-than-expected yields in North America last year have contributed to tightening carryover stocks, he added.
“(There are) supply-side concerns in Brazil. Their (safrinha) corn crop has just gotten whacked; they’re going to be short. That brings us to the United States, in particular, as the No. 1 destination for world (corn) buyers. We’ll be top dog in the export market,” Lusk said.
“By the time rains occur, (the markets) will ease off here. But should they not occur, we can have a real short squeeze on the market.”
The U.S. Department of Agriculture is scheduled to release its latest supply and demand report on Thursday, but Lusk does not expect any major changes to current projections.
“I don’t think we’re going to see too many surprises,” he said. “They’re not looking for big adjustments. They’re pricing in a 50 million-bushel decrease in corn; wheat is nearly the same as last month at 869 million bushels, last month it was 872 million… I don’t understand why there would be a bigger adjustment until they update the acres.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
