Weather concerns continue to support corn, soybeans
The expanding drought conditions across the heart of the country sent soybeans higher Friday. The biggest concern is that the drought conditions are hitting some of the highest-producing parts of the country. And while there’s some scattered rain in the forecast, it still has to materialize. The market is also finding strength as soybean oil stocks fell and the prices pushed higher. Soybean meal export demand is improving. Also contributing to support Friday, Rosario Grain Exchange again dropped Argentina’s soybean crop as harvest is over. The crop is estimated at 20.5 million tons, down 5% from the prior guess and considerably smaller than a year ago due to drought.
Corn pushed higher as drought conditions have intensified in some of the key growing areas in the U.S. With nearly 90 percent of the Midwest experiencing some form of drought, it is likely some impact on early development. Adding to that, weather models aren’t showing significant rain in the forecast anytime soon. The market is already doing some price rationing. Demand hasn’t seen significant improvement as Brazil continues to be the better buy on the global market. But as temperatures push higher with the continued dry conditions, and pollination just around the corner – the market is focusing more on supply and less on demand.
Back-to-back days of higher prices for wheat, supported by strength in corn and soybean. Paris milling wheat futures were also higher. Weather is the story for the wheat complex as well. The spring wheat belt is feeling the pressures of dryness and high temperatures. But it isn’t limited to just the US, weather is also impacting crops in Europe, Ukraine, and Argentina. The market continues to monitor the Black Sea Grain initiative.