Thursday, June 1, 2017

Ag Futures: "Grains open June on firm note, as global weather fears rise"

Last Chg
Corn 373-4+1-4
Soybeans 918-2+2-2
Wheat 430-4+1-2

From Agrimoney:
Be careful what you wish for.
That is, China has been on a mission to cut its corn inventories, built up by a now-reformed subsidy scheme which offered generous guaranteed prices to growers.
It is now using financial enticements and auctions to encourage consumption of the grain, besides moves to cut corn sowings and output.
And the country, the second-ranked corn producer and user, looks to be getting a bit of unwanted help on the latter score from Mother Nature, in the form of unduly dry weather which is gaining increasing attention among global investors.
'Rain is badly needed'
"Northern China's dry and warm weather problem will last at least another 10 days, creating additional problems," said Terry Reilly at Chicago broker Futures International.
"Some relief was seen during the past week but the rain amounts were not great enough to replenish subsoil moisture levels.
"Keep in mind this is more a problem for grains than oilseeds as corn plantings are well under way in northern China and oilseed plantings tend to start around now.
"Either way, rain is badly needed for all crops."
'May become critical'
World Weather flagged the incidence of ENSO conditions which are towards the El Nino end of the spectrum, if viewed as neutral overall.
"El Nino years tend to leave the north China Plain drier biased," the weather service said.
While 2017 "is not considered to be an El Nino year… the longer seasonal rains are delayed the higher the potential impact might be on developing summer crops"....