The extended forecast in Brazil remains hot and dry, potentially impacting their safrinha crop yield potential, with harvest still approximately a month away.
The most recent US drought monitor map indicates improving conditions, with the drought area shrinking. Furthermore, with good rains forecasted over the next few days, conditions are expected to continue improving over the next week.
According to the Buenos Aires Grain Exchange, Argentina’s corn crop condition has declined to only 17% rated as good to excellent, marking a 3% decrease from the previous week.
The South African corn crop is projected to decline to 13.4 million metric tons compared to 17.1 million metric tons last year. This further adds to the bullish narrative, as they will likely need to increase corn imports.
After opening slightly higher this morning, palm oil futures have shifted to negative territory. Meanwhile, soybean oil futures are currently holding steady just above unchanged levels. With world vegetable oil markets on a downward trend, this may continue to exert pressure on bean oil.
Brazilian soybean basis levels have shown signs of strengthening, accompanied by a rebound in their currency. This development could potentially enhance the competitiveness of US exports, although concerns about global demand persist, particularly regarding China.
Argentina’s soybean harvest is reported to be 26% complete, which is roughly half of the average pace. Progress has been hindered by rains, slowing down their harvesting activities this year.
At the time of writing, July Chicago wheat is testing its 200-day moving average (about 628). It has not closed above this level since July 2023, so a rally above this resistance level may signal more upside potential.
Eastern Ukraine and southwestern Russia continue to be too dry and warm and are expected to remain that way for the next 10 days. This may have helped wheat to rally over the past several sessions.
Paris milling wheat futures are on an upward trend, providing support to the US market. In a significant development, the September contract closed above its 200-day moving average yesterday for the first time since July 2023. Additionally, French wheat conditions have reportedly declined to their lowest level in four years, with only 63% rated as good to excellent.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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