After a raucous start to the week, grain and soy markets have settled down a bit overnight and may be in the preliminary phase of stabilizing once again. Corn continues to struggle against the backdrop of great planting progress, 90% complete, and a favorable forecast for moisture and rising temperature, while beans have found some encouragement on a rebound in the oilseed trade. That said, planting progress remains well ahead of average here as well, coming in at 75% compared with a norm of 54%.
While China has been absent from the daily export sales report for a couple of days now, it should be noted that their buying power against the dollar continues to improve. This week the Renminbi has poked into higher highs, reaching the loftiest levels it has traded at since mid-2018.
There was an increase in rainfall in several regions in Brazil over the weekend, but it would best be summed up as too little, too late. This prompted Dr. Cordonnier to lower his estimate for combined corn production by 2 MMT to 95 MMT.
There is an old expression that if I didn’t have bad luck, I would have no luck at all, and that would seem to pretty well summarize what has happened in Argentina this year. Dryer than normal conditions not only hurt yield but are now causing logistical nightmare with low water levels, and then to top it all off, port worker strikes at Rosario. Oh, and let’s not forget, as I mentioned last week, farm organizations are threatening strikes to protest the government plan to suspend beef exports for 30-days in an effort to temper domestic prices. Regardless, harvest moves on, and it is estimated that beans are now 85% complete and corn 28%. This compares with averages of 82% and 36%, respectively.
On the macro scene this morning, we find energies flat, metal under pressure, financial instrument higher, equities higher and the dollar lower.