Tuesday was a mostly positive day for our markets. Harvest corn closed up 2 1/4, harvest soybeans closed down 3 1/2, harvest winter wheat closed up 4 and harvest spring wheat closed up 12. In the overnight trade all of our markets are on the positive side. Oil closed up $1.86 yesterday at $84.34 per barrel. It is stronger in trading again this morning with it now priced at $87.40. Our dollar started out yesterday morning at $0.711 US and then went down to $0.708 US early in the afternoon. It has come up since then with it currently valued this morning at $0.710 US.
US soybeans on the world market are now very competitively priced. They are supposed to be priced about even with soybeans from Brazil for August and then they enjoy a price discount versus soybeans from Brazil in September and going forward. Brazil shipped just over 12 million tonnes of soybeans to China in June with total imports into China reaching 13.5 million tonnes in June. China has been making some recent purchases of US new crop soybeans but still in just small amounts. They have to make a lot of purchases to reach the 25 million tonne target that President Trump has said they have agreed to.
New crop corn futures closed yesterday just above their 100-day moving average for the first time in a couple of months. This market is being supported currently by a few different items.
– Of course, the current issues with shipments out of the Black Sea is one of the support items.
– Production out of Europe is estimated to be about 47 million tonnes this year which is a decrease of 10 million tonnes from last year. The USDA last projection had production from Europe at 53.8 million tonnes.
– Potential purchases from China that would go towards the $17 billion of agricultural purchases target that is supposedly in their never released trade agreement with President Trump.
– Finally, the thoughts that yield is being hurt in the Northern Corn Belt in the US with the recent hot dry weather and the lack of significant precipitation in the two-week forecast.
When all of the above are taken into consideration it is somewhat easy to make the case for higher prices on the CBOT going forward.
The wheat market remains bullish with shipments out of the Black Sea region at least being temporarily significantly decreased. How this will play out over the next few weeks / months is yet to be seen.
Crude oil prices are jumping up again with the troubles between Iran and the US escalating.
Geoffrey Guy | 613-880-2707
Delores Seiter | 613-880-7458
Bob Orr | 613-720-1271
Tony Mitchell | 613-227-2525
Office | 613-489-0956
