From Agrimoney:
Well, the modestly bullish news
keeps ticking in for ag markets.
For soybeans, for instance, consultancy
Globaltecnos overnight poo pooed ideas of Argentine exporting 11.4m tonnes of soybeans in 2015-16, as forecast by the
US Department of Agriculture, after heavy rains damaged the crop.
Globaltecnos instead sees shipments
falling to 8.5m tonnes, from 11.5m tonnes last season, with some quality issues
too, warning that "Argentina will not be able to fulfill its bean export
projections", and with knock-on effects for shipments of processing products
too.
(With Argentina the top exporter
of soymeal, such concerns have spurred
particular strength in Chicago soymeal futures, up more than $100 a short ton since
early April, with the July contract finishing the last session at a 10-monght closing
high of $372.70 a short ton.)
'Brazil could run out of corn'
In the corn pit, meanwhile, even after the
Environmental Protection Agency late on Wednesday issued a raised target for US
ethanol use in 2017 of 14.8bn gallons, up from 14.5bn gallons this year – meaning
more corn usage – Michael Cordonnier underlined the problems facing Brazil's
safrinha crop.
With Mato Grosso, the main safrinha corn-growing state,
looking on course for its worst yields in five years, and the worst since
genetically modified seed has become widespread, "most observers feel the
safrinha corn loses could total 10m tonnes or more", the influential analyst
said.
"The safrinha corn crop has continued to decline from hot
and dry weather."
And this when Brazil needs to replenish its supplies after a
bumper export programme last year, with government stocks down to 900,000
tonnes – "which represents six days of usage".
Assuming a crop loss of 10m tonnes, "Brazil could potentially
run out of corn in early 2017 unless exports or domestic consumption is
severely curtailed," Dr Cordonnier said, flagging expectations that it will be
shipments that take the hit.
"Brazil's corn exports for marketing year 2015-16 could be
in the low 20m-tonne range instead of the current estimate of 28.4m tonnes," a
shortfall which "could open up the potential for increased US corn exports".
'Fears about quality
and yields'
The bullish case for wheat is harder to make, given that northern
hemisphere crops look largely in decent shape.
Still, the southern US Plains are facing excessive rains,
which are worrying some investors.
"The rain will be frequent enough to raise fears about
quality and yields so it will support the market to some degree," said Tobin
Gorey at Commonwealth Bank of Australia....MORE
