Forecasts of dry, warm weather in the US for the next fortnight in the Corn Belt were enough to allow the markets to rebound. With tight global balance sheets, the slightest climatic adversity is leading to cautionary buying and extreme volatility. On the other hand, the slightest improvement also leads to profit-taking. This should encourage all to be cautious and to rely on good management.
Prices in the Black Sea basin are following the trend with good new crop demand for Russian wheat, despite the introduction of export taxes.
In corn, analysts continue to estimate a crop of 90-92 Mt for Brazil, compared to the 102 Mt reported by the USDA in May. The first harvests are beginning in the country in Parana, a state that has been particularly affected by the water deficit of recent weeks.
Prices for all commodities rose sharply in Chicago yesterday as weather fears returned to the Corn Belt. Indeed, forecasts indicate dry and hot weather for the next 15 days, leading to fears of a water deficit for this water-consuming plant.
Export inspections were also at or above the top of expectations, particularly for corn, with 80.7 million bushels for corn, 9.43 million for wheat, and 7.06 million for soybean.
The markets were also supported yesterday by the equity markets and by the firmness of energy prices, gas, and crude oil.