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