Ripples from the Iowa ‘derecho’ storm that went through the other week are still being felt. The ProFarmer tour has recently been through the areas affected and the numbers coming out of there are pretty ugly. National corn conditions dropped another 5% to 64% good to excellent, with Iowa conditions dropping another 9% (19% in total since the storm) in the Gd to Exc category.
ProFarmer has also pegged the US corn crop at 376mmt, compared to the USDA at 388mmt. Also, interesting to note, is that poor pasture conditions in the US Plains have meant that the number of cattle on feed is higher than expected, potentially resulting in greater feed demand. Corn futures have moved up a reasonably significant 30c/bu since the storm.
The wheat market had been enjoying a string of positive moves in CBOT since last week on the back of Chinese business. In fact, Chinese import appetite has been through the roof, especially for US products, in an apparent commitment to the Phase 1 trade deal. (Table 1)
In Argentina, hard frosts in the past week are believed to have caused ‘irreversible damage’ to some of this year’s wheat crop. Severe drought since mid-May has already seen crop estimates lowered. Very cold night time temperatures were recorded over the vast majority of arable country but it will be sometime before the extent of the damage is realised. Some showers and storms are forecast in the western regions which may provide some relief but this remains a flag to watch.
Overall, the market still feels heavy but we are reminded that the final figure won’t be known until it is in the bin.
The week ahead….
Looking ahead, it feels like there is a bit to play out with regards to the wheat market. Chinese demand, US corn and Argentinian wheat could see volatility re-enter the market.
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In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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US, China and Argentina – Welcome back volatility
ProFarmer has also pegged the US corn crop at 376mmt, compared to the USDA at 388mmt. Also, interesting to note, is that poor pasture conditions in the US Plains have meant that the number of cattle on feed is higher than expected, potentially resulting in greater feed demand. Corn futures have moved up a reasonably significant 30c/bu since the storm.
The wheat market had been enjoying a string of positive moves in CBOT since last week on the back of Chinese business. In fact, Chinese import appetite has been through the roof, especially for US products, in an apparent commitment to the Phase 1 trade deal. (Table 1)
In Argentina, hard frosts in the past week are believed to have caused ‘irreversible damage’ to some of this year’s wheat crop. Severe drought since mid-May has already seen crop estimates lowered. Very cold night time temperatures were recorded over the vast majority of arable country but it will be sometime before the extent of the damage is realised. Some showers and storms are forecast in the western regions which may provide some relief but this remains a flag to watch.
Overall, the market still feels heavy but we are reminded that the final figure won’t be known until it is in the bin.
The week ahead….
Looking ahead, it feels like there is a bit to play out with regards to the wheat market. Chinese demand, US corn and Argentinian wheat could see volatility re-enter the market.
Have any questions or comments?
Click on graph to expand
Click on graph to expand
Click on graph to expand
Data sources: USDA, Reuters, ProFarmer
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Independent analysis and outlook for wool, livestock and grain markets delivered to you as it’s published
Listen to the podcast
Join the Mecardo team for the Commodity Conversations podcast, where we provide short weekly market recaps and longer conversations with guests to discuss the drivers and trends in livestock, grain and fibre markets.
Research: Analysis of the Australian sheep flock
In this report for LiveCorp and MLA, we analysed the historical trends in the demographics of the Australian sheep flock, examining domestic factors that influence farm-level enterprise decision making.
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We don’t just bring you the most up to date market insights. Find out more about Mecardo’s services including risk management advisory, modelling, benchmarking, research & consultancy.