Ag price falls have gone far enough - except in cotton, says Rabo
The drop in ag commodity prices – bar cotton – has gone far enough, Rabobank said, foreseeing "marginal support" for wheat futures, "bullish" prospects for cocoa and sugar, and scope for coffee price gains too.The bank downgraded price expectations for many contracts, including wheat, for which it cut forecasts for quarter-average prices in Chicago by up to $0.40 a bushel, and in Paris by up to E0.15 a tonne.Nonetheless, the reduced price forecasts - which for the October-to-December quarter stood at $4.60 a bushel for Chicago wheat and E170 a tonne for Paris – remained above the levels that markets are pricing in with December contracts standing at $4.32 ½ a bushel in Chicago on Thursday, and E160.50 a tonne in Paris.The drop in wheat futures to contract lows this week reflected "seasonal" factors, the bank said, "as major harvests progress at pace without issue".In fact, prices should see "marginal support going forward, driven by incentives to carry physical grain, and the commercial unwinding of short positions", Rabobank said, in the second positive comments within 24 hours on wheat futures, following a sanguine outlook from Commerzbank.Corn crop setbacksRabobank flagged some hope for gains in corn prices too, sticking with a forecast for Chicago prices averaging $3.70 a bushel in the last three months of this year, ahead of the $3.56 ¼ a bushel that the December contract was trading at.The bank flagged the potential from heat and dryness to Ukraine's harvest, which it pegged at 25m-26m tonnes, behind a US Department of Agriculture forecast of 28m tonnes, while seeing the latest Argentine harvest at 39.5m tonnes, 1.5m tonnes below the USDA estimate.The latest Brazilian crop was put at 98m tonnes, 500,000 tonnes behind the USDA estimate.For soybeans, prices were forecast averaging $9.50 a bushel in the October-to-December period, a touch higher than the $941 ½ a bushel suggested by November futures.'Harvest disruptions ahead'...
The folks walking the fields tend to concur. From AgWeb:
Scouts on the eastern leg of the Farm Journal Midwest Crop Tour are rumbling their way to Spencer, Iowa, this evening. Along the way, what’s stood out to Chip Nellinger, with Blue Reef Agri-Marketing, is that ear counts have been way down, especially along the border of Iowa and Illinois.
“They’re good-looking ears, just not enough in the field,” Nellinger told Mike Adams, AgriTalk Host, earlier today.
What does that mean to Nellinger’s corn yield outlook?
“The market is kind of thinking we’ll end in the 166- to 168 bu. area, but in my mind it wouldn’t be a big stretch to come in well under that which would shock the market,” he says....MORE