The WASDE report was not a large market mover. Corn futures are projected to be neutral, and Beans are projected to be neutral as well. Corn ending stocks were unchanged from last month’s report. USDA leaves South American production unchanged. Bean ending stocks were also unchanged. USDA leaves South American bean production unchanged. News out of the Middle East and weather will be the main market movers to watch. Oil prices also have been directly influencing the grain markets. Average Farm Price for corn is $4.15 and bean is $10.30.
There has been a spike of the number of funds moving into the commodities. Inflation has been another topic of discussion with the perception that it will continue rise. There are more filings of farm bankruptcy with the largest state being Arkansas.
The war in Iran adds a good bit of market uncertainty. Part of this is caused by the idea that the US is trying to negotiate with a different cultural mindset that doesn't value the same things as we do. US and Iranian officials are scheduled to meet Saturday in Islamabad, Pakistan, with shipping access through Hormuz, which carried roughly one fifth of global oil and liquefied natural gas flows before the war, emerging as a key point of contention. Trump is drawing a line in the sand that Iran must open the Strait of Hormuz, or he will go back to aggressively bombing them. Iran’s goal remains to extend this fight as long as possible, believing that the rest of the world will tire of the pain of tight energy and fertilizer supplies and rising inflation, leading the world to turn against Israel and the United States.
Bean exports are still favoring South America as their bean prices are over $1.00 per bushel cheaper than the US. Some traders expect potential more delay in the trade agreement discussions between the US and China. However, it is also perceived that there is a growing incentive to work together. Beans unfortunately may be on the bottom of importance relative to the other items.
Corn prices have not followed the higher fertilizer costs. This is said to be most of the corn growing states feel there will be enough fertilizer to cover the need. States in the Minnesota over to the Dakotas are said to be the one under the worst conditions of lack of fertilizer. In addition, there remains a significant amount of old and new crop corn unsold across the US. Both items are keeping a lid on prices.
Long-term weather forecast is indicating one of the strongest El Nino we have on record. That will bring a lot of rain through the central part of the US. The summer forecast is to be stormy.
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