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Reuters
10 hours ago
- Climate
- Reuters
Crop Watch: Corn improves again but soybeans still iffy: Braun
NAPERVILLE, Illinois, June 9 (Reuters) - Health conditions across the U.S. Crop Watch corn and soybean fields began this season at multi-year lows. Recent weather has lent a bump to the corn ratings, though soybean scores remain just so-so overall. However, one of the Illinois Crop Watch soybean fields might qualify as the ugliest the producer has ever seen, placing extra emphasis on the near-term weather outlook. The week ahead could feature an opportunity for improvement to both corn and soybeans, though the temperature outlook may present some limitations. Temperatures across the U.S. Corn Belt last week were mostly below-average and all locations except the Dakotas received at least 1.5 inches (3.8 cm) of rain. The 11-field, average Crop Watch corn condition rose to 3.8 from 3.68 in the prior week. That is above the same week a year ago but below the comparable weeks in the previous three years. However, the 0.23-point increase over the last two weeks is well above a normal two-week delta for Crop Watch corn ratings. Improvement in the latest week was driven by Kansas and the Dakotas. The 11 Crop Watch producers assign weekly condition scores to their corn and soybean fields using a scale of 1 to 5. The ratings are similar to the U.S. Department of Agriculture's system where 1 is very poor, 3 is average and 5 is excellent. Only eight soybean fields were available for conditions last week, averaging 3.56. This week's average of the same eight fields drops to 3.5 on a reduction in southeastern Illinois, which is one of the nation's top soybean-producing regions. That field received over 3 inches of rain last week, piling on to the ample totals from previous weeks. The field conditions stand at 1.5 and the producer describes the situation as follows: 'Cannot stress enough how wet it is, the ground looks slimed.' Excess moisture is also plaguing crops in Ohio. The Crop Watch beans there were planted last Wednesday, though the field has taken 6 inches of rain since, and the plants have not yet emerged. This week, the 10-field average soybean condition score, sans Ohio, stands at 3.4. Aside from troubles in southeastern Illinois and Ohio, Crop Watch beans are looking super-strong in Indiana and western Iowa, and solid in both Kansas and eastern Iowa. Nearly all the Crop Watch producers expressed a desire for some drier conditions in the days ahead, though the forecast as of Monday was mixed on those prospects. They also noted the need for some warmth and sunshine, which is in the forecast for most areas for at least a couple of days this week. Crop Watch producers assessed that the week-ahead weather outlook was more positive than negative. But for some areas, particularly in the northwest Corn Belt, upcoming temperatures may still be a bit too cool. Producers will be watching for how the ongoing Canadian wildfire smoke might impact crop growth, as the particles can block much-needed solar radiation and potentially lead to cooler-than-expected temperatures. Karen Braun is a market analyst for Reuters. Views expressed above are her own. Enjoying this column? Check out Reuters Open Interest (ROI), opens new tab, your essential new source for global financial commentary. ROI delivers thought-provoking, data-driven analysis of everything from swap rates to soybeans. Markets are moving faster than ever. ROI, opens new tab can help you keep up. Follow ROI on LinkedIn, opens new tab and X., opens new tab
Globe and Mail
12-05-2025
- Business
- Globe and Mail
Looking for Value? September Soybean Meal Futures Could Be a Buy Here.
September soybean meal futures (ZMU25) present a value-buying opportunity on more price strength See on the daily bar chart for September soybean meal futures that prices have been trading mostly sideways for the past month. It's my bias that this price action is 'basing' that has or soon will put in a market bottom. Longer-term soybean meal price chart history shows that prices around the $300.00 per ton level are value-buying opportunities. Fundamentally, the U.S.-China trade war is starting to thaw following the weekend trade talks between the two nations that produced positive results and a 90-day delay in most tariffs against each other. China is a major soybean consumer. Better U.S.-China trade relations will very likely mean more U.S. soybean exports to China. Also, soybean traders know this is the time of year when weather-market scares in the U.S. Corn Belt pop up quickly to rally prices. More years than not, some degree of a weather scare pops up in the soybean market to boost prices. A price move in September meal futures above chart resistance at $305.00 would become a buying opportunity. The upside price objective would be $335.00, or above. Technical support, for which to place a protective sell stop just below, is located at the recent low of $294.30. IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature. Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Globe and Mail
08-05-2025
- Business
- Globe and Mail
Corn Bulls Have a Weather-Market Wild Card. How to Trade It.
See on the daily bar chart for July corn futures (ZCN25) that prices have dropped down to solid technical support around the $4.50 area. See at the bottom of the chart that the Relative Strength Index (RSI) is reading below 30.00, suggesting a market that is overdone on the downside. Also, see that the RSI is presently in a posture and at a price level that has correctly signaled market bottoms being close at hand over the past few months. Fundamentally, weather in the U.S. Corn Belt over the past few weeks has been bearish for corn prices, with rains and warmer temperatures that benefit corn production. However, much of the Corn Belt will see drier and warmer weather for the next roughly 10 days, which could begin to deplete soil moisture if that weather pattern extends. Also, the corn market bulls have a weather-market wild card in their vests. Many more years than not, the corn market does experience a weather-market-induced price rally during the U.S. planting and growing season. Consider buying a call option on July corn futures, with an upside price objective of $5.00 or above. The option expires the third Friday in June. IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature. Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%): Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
Bloomberg
06-05-2025
- Business
- Bloomberg
Can grains buck deflation?
Can corn stay above $5? Trend is toward $4 Corn appears as a bear market that's bounced, with threshold resistance at about $5 a bushel. That the 2025 high at $5.04 a bushel on Feb. 19 coincided with a pump in futures open interest to the highest ever and managed-money (hedge fund) net-longs spiking to almost 20%, could signal an enduring peak. Farmers took advantage and lightened up on inventory, but prices are mostly about this year's production. Absent a poor growing season, it may take something unusual to end the downtrend. Prices might need to dip below 2024's front future nadir of $3.60 for a low-price cure. The about 6% jump in prospective corn planted acres to 95 million suggests plenty of new crop supply in the wings, especially if yields stay near last year's 183 bushels per acre. Grains on track to follow crude oil lower Gold at the top of our annual performance dashboard and crude oil on the bottom is a deflationary track with agriculture stuck in the middle. The rest of 2025 may be about what stops these trajectories, and absent a poor Corn Belt growing season, the grains appear more likely to follow crude. Both sectors face excess supply vs. demand on the back of the price pumps to the 2022 highs. That crude's low-price cure for about two decades has been around $40 a barrel may add fuel to corn, soybeans and wheat to revert toward 2019 averages of $3.85, $8.92 and $4.94 a bushel. The dollar declining with the US stock market is a tailwind for soybeans and wheat, of which the US exports roughly 45% of production. Declining US exports along with demand from China vs. rising South American supply are top corn and soybean headwinds. Deflationary dominoes might be tumbling What matters in 2025 could be the scope for downward reversion in US stocks with a worthy catalyst. Our graphic shows US equity prices might have just started declining, on the back of falling crude and Chinese government bond yields. History points to deflationary cycles reciprocal to inflation and this one could have been delayed by US deficit spending that was unprecedented outside of recession or war, as highly speculative assets like cryptocurrencies stretched to records. Reversion is emphasized, as that's what Brent crude was doing before US equities peaked. The low-price cure has been around $40 a barrel over the past 20 years. Gold might be a canary in the coal mine, with the gold/silver cross at 100 and the yellow metal beating beta and most commodities well before US tariffs and austerity. Whither commodities if US stocks break down? Copper, corn and natural gas on the same scale as China's 10-year government yield show downward leanings and might face headwinds if US stocks fall. A final barrier for global deflation to emerge from the inflation distortions of 2020-22 could be tumbling, as evidenced by the S&P 500 breaching its almost two-decade uptrend vs. the MSCI Ex-US Index. The typical commodity process of probing for low-price cures following spikes akin to the 2022 highs might not be done, especially if US equities drop. Average 2019 prices could be guides of the gravity pull. For economy/stocks sensitive copper, that's about $2.70 a pound vs. $4.70 on April 17. Corn is less subject to equities, but was about $3.85 a bushel in 2019 vs. $4.90 now. Gas often falls below $2 per million British thermal units after spikes above $4. Extended surge fading to former price level Corn has remained above $4 a bushel since the pandemic, pressing the question of whether elevated prices are signaling a new point of stability. Since 1990, corn prices have been relatively stable for two extended periods. The first, roughly 1996-2006, followed a drought-damaged crop in 1995 and was essentially a return to the mid-$2 range established in the early 1970s. The second period of stability followed the 2005 introduction of the Renewable Fuels Standard in the US. Prices stabilized around $3.70, though the financial crisis and a drought in 2012 drove spikes in pricing. High corn prices, without a visible temporary factor (such as drought), can begin to create self-sustaining conditions as slower-moving costs, such as rent or seed, begin to ratchet up. Soybean prices hover near US farm breakeven Our US soybean scenario suggests the typical farmer is facing a breakeven cost near $9.67 a bushel for the 2025 crop, above the current price reflected by the National Soybean Index. This would likely send farmers into planting preparing to stall sales in hopes of better pricing. The USDA's prospective plantings report suggests production will be roughly flat assuming yields hold near the 52.5 projected in its Annual Outlook Forum. Despite a slower-than-expected ramp-up in renewable diesel demand, crushing capacity continues to rise. Though crush margins are well below the recent peak, they're higher vs. spring 2024. Should new capacity run near historical rates, we expect more crushing than the USDA and tighter stocks-to-use. There appears to be room for the USDA's latest 2025-26 market-year price forecast of $10 to rise. China could use a larger Brazilian soy crop Brazil's increasing soybean production could be crucial to prevent a shortage of soybean supply in China if tariffs jeopardize its US soybean imports. The world's largest soybean consuming country could simply shift to importing from Brazil, which has increased production and could export 100 million tons of soybeans to China. In 2018, when the first tariff war took place, China's imports of Brazilian soybeans surged 29.7% to 66.08 million metric tons — 75% of its total soy imports — though its soybean requirements fell as African swine fever decimated its local pig population. According to Brazil's Supplies Association, CONAB, the country's soybean production may climb 1.3 million tons to 167.4 million in 2024-25. Wilmar is among the largest soybean crushers in China. According to Brazil's Supplies Association, CONAB, the country's soybean production may climb 1.3 million tons to 167.4 million in 2024-25. Wilmar is among the largest soybean crushers in China.
