US Crop Surveys Signal Pressure on Wheat and Soybean Markets
Bertrand Oesterle, StoneX VP of Clearing and Execution Sales, analyzes the latest crop survey data, fund rolls, and global market trends affecting grains.
Key Takeaways
US and South American crop surveys point to strong corn and soybean yields
Yield expectation has pushed corn prices to new contract lows
Shifting dollar dynamics are adding further pressure to Paris wheat
Survey Results Set the Tone
Oesterle explains that the latest customer survey delivered significant figures for US corn and soybeans, with corn yields estimated at 188.1 bushels per acre, compared to the USDA's previous figure of 181. He notes, "This big figure is at a time when the crop conditions in the US remain very high, with 73% good to excellent in corn, and that's above the five year average of 65% still." Similarly, soybean yields were reported at 53.6 bushels per acre, which is above the recent USDA estimates. "It's well above the 52.5 mark from the USDA last month," Oesterle says, placing additional focus on the upcoming USDA report on August 12th.
South American Production and Chinese Demand
South American harvest progress and production estimates continue to play a key role in global sentiment. Oesterle details that Argentina's corn is 88% harvested, while Brazil's second corn crop is 81% completed. On soybeans, new Brazilian crop estimates reach as high as 179.8 million tons. At the same time, "China stating that their soybean imports in the short term might be a touch less aggressive because their domestic stocks are high," despite recent Argentine exports to China in soymeal.
Fund Rolls and Wheat Market Pressure
Turning to wheat, Oesterle emphasizes the impact of fund roll activity. "We've seen Chicago corn making some new contract lows. Those contract lows have spilled over into Chicago wheat, which also made a contract low. And that's also spilled over into Paris, meaning wheat." In Paris, December wheat fell below 200 and reached a 199.50 contract low. He tracks open interest shifts and notes the barometer for fund rolls moving toward expiry on August 15th. Despite weather-related crop issues in Europe, US market pressure continues to dominate, with the US winter wheat harvest at 86% and Russian exports shifting from southern to central regions.
Currency Moves Add Volatility
Oesterle highlights the influence of currency shifts, particularly in the Eurodollar. "Over the past week, which was one of the main elements that was, encouraging the Bulls last week. But that has faded away... that's mostly on the back of the, fed governor Kugler, resigning and presumably being replaced by Trump by the end of the week." This is expected to favour a weaker dollar policy and adds another layer of complexity to global grain price action.
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---- Expert: Bertrand Oesterle, StoneX VP of Clearing and Execution Sales
Grains & Oilseeds
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