CHICAGO, April 17 (Xinhua) — CBOT agricultural futures went up in the past week as the U.S. dollar closed lower for the second consecutive week.
Chicago-based research company AgResource holds that the grains market has resumed the bullish trend.
Spot CBOT corn touched 6.00 dollars for the first time since 2013, and still the U.S. market is viewed as cheap when compared to Ukraine’s FOB market and Brazil’s domestic market, AgResource noted.
Mother Nature will determine the speed and intensity of the corn rally through pollination. Weather in Brazil over the next 10 days will be critical as seasonal dryness sets in across Mato Grosso/Goias in early May. Any hint of U.S. Midwest heat and dryness may add 0.50-0.75 dollar per bushel to December corn rather quickly. AgResource suggests that the downside risk is limited to breaks of 10-15 cents.
U.S. wheat futures ended sharply higher. CBOT wheat has found strong support at a longer-term uptrend line. AgResource maintains that wheat’s bull trend will be extended into early 2022 amid record Chinese imports and global consumption.
This bullish outlook is valid with normal weather but will be accelerated if weather fails to improve across the Northern U.S. Plains, Canada, and Western Europe in the next 15-60 days. Near-term weather forecasts in these regions remain concerning, with historic drought firmly in place across the Northern American spring wheat belt.
Early week selling in soybeans uncovered cash related demand below 14 dollars, which carried prices higher into the weekend. May soybeans marked the highest ever weekly close for both the May and July contracts.
Crush margins are deeply green and cash supplies are quickly tightening. In U.S. East Midwest, record exports have depleted stocks, while the drought-stricken areas of the West Midwest are also seeing supplies dry up.
Soybean basis in Brazil has begun rising as harvest winds down amid record large exports. Harvest in Mato Grosso was reported at 100 percent complete on Friday. Few will want to be short heading into May 1st notice day amid the strengthening cash markets, AgResource noted.