Another choppy, volatile week in grain markets is expected with input from the two big Ws — weather and WASDE.
Don Roose, president of U.S. Commodities in West Des Moines, Iowa, says he expected no changes in the USDA’s WASDE report acreage estimates as usual this time of year. But, markets will pay some attention to yield forecasts in the June 9 World Agricultural Supply and Demand Estimates.
July corn “was hammered” on June 5, and that could spill over to the WASDE report, says Jack Scoville of Price Futures Group. The demand side of this report is also being met with some concern.
“You could see a cut in export demand for both crops, especially corn, and that will translate to an increase in ending stock,” Scoville says.
With China canceling orders of U.S corn, the demand for corn could be down as much as 20 million bushels, Roose says.
As Brazil has been meeting world soybean needs — with even the U.S. importing soybean oil — demand for U.S. soybeans is expected to also be lower. It could be down 10 million bushels, he says. Both drops would be reflected in closing stocks.
In South America, expectation is that Argentina’s production is down again, Brazil’s soybean production is up and corn is unchanged.
Roose says the market will be watching for movement of grain in South America in the coming weeks since the U.S. won’t be competitive with grain until the end of August.
Back in the U.S., “the drought is catching people by surprise,” Scoville says.
Dry weather is an increasing concerns for crops.
“It looks like it’s going to get dry and stay dry,” he says.
It’s a bigger concern over time. The longer we go without rain, the more concern there will be about significant damage to the crop, Scoville says.
Still, some weather patterns indicate average to above-average conditions for corn growing this season, Roose says.
“We’ll just have to see,” he says.
