Low prices for wheat and soybeans from international competition will continue to pressure U.S. prices.
Bad news on the export front will continue to push U.S. wheat prices down, says Jack Scoville of Price Futures Group. The cheaper Russian prices for wheat will be a feature “for a while in the world market,” he says.
If Russia keeps offering wheat at such low prices in the world, “it will keep our exports down,” he said.
At the same time, the talk is that both Australia and Russia are harvesting record to near record wheat crops this year, which will give both countries plenty of wheat to export and be a negative for U.S. prices.
Scoville says the market seems to be worried that Brazil is going to export more corn.
“I’m a little less worried,” he says, because Brazil is concentrating on soybean exports.
He says Brazil usually exports a little more corn this time of year, but he’s not worried about the volume. Currently, U.S. corn prices are “very competitive” with those from South America.
“The U.S. demand has improved because of the price differentials and the lack of a Brazil offer into the market,” he says.
However, the low price of Brazilian soybeans continues to disrupt U.S. markets. Brazil is pushing its record soybean crops out into the world because it doesn’t have storage. That’s going to be a main feature of the soybean market until soybean harvest is complete in Brazil, Scoville says.
Brazil’s basis levels are still so low that some American processors can import more cheaply than buying from U.S. producers and shipping by rail, he said. Further, Brazil continues to sell a lot of soybeans to China.
As for planting season, it started out quickly with about 20% of corn and soybeans in the ground as of May 1. Soybean planting in much of the Midwest is still trending faster at this point than usual.
Although cooler and wetter weather may slow planting a little this week, Scoville expects that it will be on target with monthly expectations.
