Xinhua
22 Nov 2020, 02:14 GMT+10
CHICAGO, Nov. 21 (Xinhua) -- CBOT agricultural products rose in the past week on worrisome weather in South America, Chicago-based research company AgResource noted.
A breaking of the key resistance argues for a more bullish landscape of world commodity futures and a deeper fall of the value of the U.S. dollar. It's too early to discuss inflation, AgResource said. But the demand unleashed by a COVID-19 vaccine amid a world awash in liquidity will produce fresh interest from investors in securing a host of raw material markets, including grain and soybean amid a budding drought across South America.
CBOT corn futures rallied to new contract highs as South American weather becomes more worrisome. December is the critical month for early corn yield determination across Argentina and Brazil. Climate models remain arid for much of Brazil while near to below normal rainfall dots Argentina. South American weather is critical to near-term price determination, AgResource said.
The world exporter balance sheet can ill afford to lose more than 2-4 million metric tons of South American corn production. Ongoing dryness in Brazil will accelerate the need to ration demand. Drought in Argentina will add 275-400 million bushels to 2020-2021 U.S. exports.
AgResource predicted that corn outlook is bullish. An intermediate peak isn't expected until mid-winter. Cash sales are on hold until South American corn crop sizes are determined.
U.S. wheat futures ended the week mixed. Spot CBOT wheat held support at 5.90 U.S. dollars. AgResource doubted this level can be breached for any length of time amid increasingly bullish corn and soybean outlooks and amid uncertainty over 2021 production across the U.S. Plains and much of the winter wheat areas in Russia.
Wheat will be a follower of row crop markets during the winter months, which suggests breaks need to be used to extend supply coverage.
The Russian government will opt against using an export tax to cool domestic prices. Rather, it will provide subsidies to domestic milling industries. This will sustain large domestic wheat use in Russia, with any yield loss in 2021 proving to be ultra-bullish.
U.S. export demand stays lackluster until Australian, Black Sea and EU wheat exports slow in the first quarter. Then a more bullish wheat stance is advised as U.S. export demand growth collides with new crop yield worries. For now, wheat is a follower of bullish corn and soybeans, AgResource said.
CBOT soybeans rallied to a new weekly high but failed to breach 12 dollars, a 2016 high. Profit taking ahead of the coming U.S. holiday amid South American weather uncertainty along with it being early in the Brazilian soy growing season caused the pause. Nevertheless, a leap above the resistance is expected unless there is a dramatic change in the Brazilian weather pattern. U.S. and world soybean stocks are just too tight for the market not to engage in a dynamic demand rationing effort without a quick wet change in the weather forecast for Northern and Central Brazil, AgResource noted.
Get a daily dose of Vietnam Tribune news through our daily email, its complimentary and keeps you fully up to date with world and business news as well.
Publish news of your business, community or sports group, personnel appointments, major event and more by submitting a news release to Vietnam Tribune.
More InformationLahore [Pakistan], July 12 (ANI): Police in Faisalabad have arrested two suspects, Bilal Nawaz and Umar Aslam, in connection with the...
New Delhi [India], July 12 (ANI): The Ministry of External Affairs (MEA) has released its annual report for 2024, highlighting India's...
London [UK], July 12 (ANI): Shubman Gill, who has developed an appetite for breaking milestones, continued with the trend and added...
Dhaka [Bangladesh], July 11 (ANI): Bangladesh has agreed to work with Malaysia to investigate allegations of terror activity against...
New Delhi [India], July 11 (ANI): The National Investigation Agency (NIA) on Friday chargesheeted five accused in a Mizoram case related...
Kuala Lumpur [Malaysia], July 11 (ANI): Minister of State for External Affairs, MoS Pabitra Margherita, held interactions with the...
In the past month alone, 23 Israeli soldiers have been killed in Gaza—three more than the number of remaining living hostages held...
LONDON, U.K.: At least 13 people are believed to have taken their own lives as a result of the U.K.'s Post Office scandal, in which...
WASHINGTON, D.C.: Travelers at U.S. airports will no longer need to remove their shoes during security screenings, Department of Homeland...
WASHINGTON, D.C.: An elaborate impersonation scheme involving artificial intelligence targeted senior U.S. and foreign officials in...
SLUBICE, Poland: Poland reinstated border controls with Germany and Lithuania on July 7, following Germany's earlier reintroduction...
WASHINGTON, D.C.: After months of warnings from former federal officials and weather experts, the deadly flash floods that struck the...