MarketsFarm – Recent weather forecasts for much of the United States put pressure on grain prices on the Chicago Board of Trade (CBOT) during the week ended Aug. 2.
Cooler and wetter conditions are expected for the U.S. Midwest during the first half of August, which could help stabilize corn and soybean crops affected by hot and dry weather. Rain is also expected for parts of the U.S. Northern Plains this week.
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Jack Scoville of Price Futures Group in Chicago said those forecasts are bringing prices to depths unseen since mid-July. The September corn contract dropped 52 cents per bushel to close at $4.8825 on Aug. 2, while September soybeans lost 92 cents to $13.7650. The November soybean contract fell 98.75 cents/bu. to US$13.2125.
“The weather for corn and soybeans has changed. It’s gotten wetter and cooler for the month of August and that has resulted in the selling we’ve seen this week,” he said, adding that lagging demand for U.S. grains compared to last year were also holding back potential rallies.
Wheat prices also went down during the week despite Russia’s withdrawal from the Black Sea Grain Initiative and subsequent attacks on grain facilities at Ukrainian ports. Chicago September wheat lost 80 U.S. cents to US$6.40/bu., while Kansas City September hard red wheat went down 78.25 U.S. cents to US$7.87/bu. Minneapolis September spring wheat closed at US$8.49/bu. after a weekly drop of 46.75 U.S. cents.
“The wheat market’s been down because even with the war going on in Ukraine and Russia, exports seem to be flowing from that part of the world. Maybe not quite through the Black Sea for Ukraine, but they’re able to export through the Danube,” he explained. “We’re ignoring some dry weather (in the northern U.S. and Canada), which has been affecting spring wheat production…but (the trade) doesn’t seem to care much.”
Scoville also said that a stronger U.S. dollar, up 1.5 points over the past week on the U.S. Dollar Index to 102.59 on Aug. 2, did not have a large effect on the markets.
He believes there will be additional weakness in the short-term, but not necessarily in the long-term.
“Eventually, we’ll recover. Our yields are still going to be down a little bit, for corn especially. (The U.S. Department of Agriculture) thinks we’re going to get a record (yield) for soybeans, which I don’t think we’re going to get. It’s going to be a situation with short-term weakness and then (the market) might firm up again.”
— Adam Peleshaty reports for MarketsFarm from Stonewall, Man.
