MarketsFarm — With soybean and corn seeding nearing completion across the United States, attention in the futures markets is focused squarely on growing conditions.
“We’re in a weather market, so look for traders to keep these prices chopping around over the next few weeks,” said Terry Reilly of Futures International in Chicago.
Relatively dry conditions across the U.S. Midwest so far have kept a supportive undertone in soybean and corn markets, according to Reilly, although he noted the latest long-range outlooks were showing some improvement.
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“The next several weeks will be very important to watch crop conditions,” Reilly said, adding that recent downward revisions to soybean and corn condition ratings were supportive, with some private forecasters also lowering their yield projections for the crops.
“In general, I do look for prices to appreciate over the short term if the U.S. and Canada fall short of precipitation over the next 10 to 14 days,” said Reilly, adding that the markets will also react to the U.S. Environmental Protection Agency’s biofuel targets whenever they’re released.
The EPA had been set to release its final rule on biofuel blending mandates for the next three years on Wednesday, but requested an extension until June 21 to announce the decision. The consensus in the trade is that the EPA was too low in its original targets, according to Reilly.
For wheat, in addition to the weather in spring wheat-growing regions of the U.S. and Canada, Reilly said uncertainty over Ukrainian grain exports was providing some support given recent reports out of Russia that the Black Sea deal may not be extended.
— Phil Franz-Warkentin is an associate editor/analyst with MarketsFarm in Winnipeg.
