It’s May. Markets focused on N.Hemisphere weather
By ODA UK | Published at
European and US grain and oilseeds markets posted another strong, positive trading session yesterday, as the market fully turned its attention towards delays with US spring crop plantings. Chicago wheat added nearly 14c/bu, corn gained 15c/bu and beans rallied by 19c/bu, having traded over 30c/bu earlier in the session. As a consequence, in Europe, MATIF wheat closed €1.75 and the nearby May19 LIFFE wheat contract added £3/t.
Front and centre of the current market price volatility is the US corn crop and actually how significantly behind schedule it is, compared to previous years (this also applies to US soybean plantings) Since this is the world’s largest crop and speculators in Chicago corn futures hold a near record short position, any price-positive news was always going to prompt a sharp reaction across the globe. European markets have not been immune. How much follow-through price support we witness in our markets in the coming days and weeks will depend largely on if US farmers in the Midwest can play catch-up in the weeks ahead. As such, the only thing that really matters for the short term are weather conditions in the US Midwest. Monday’s NASS (USDA) crop conditions and planting progress report will duly have considerable influence in the weeks ahead. Additional price volatility should be expected.