Agriculture commodities prices closed the week in the red, dropping to multi-month lows, due to both easing demand and oversupply estimates.
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Better-than-expected production leads wheat prices to offset late June gains
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- Wheat prices fell after the USDA increased its projection for U.S. all-wheat production by more than 130 million bushels, which triggered another round of technical selling
- A boost in winter wheat and durum production was the reason behind this increase
- Front-month Wheat fell below $5.38 mark, for the first time in 3-month
- 2024 June Wheat exports strengthened +18.5% compared to previous year, signaling oversupply concerns
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Lower demand pushes corn futures down
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- Corn prices remained relatively stable after the freefall of late June. Front month contract closed at $4 mark, with -13.7% YTD return
- Brighter supply outlook and lackluster demand significantly weigh on corn prices, in combination with the accumulation of record-high corn stocks in the US not seen since 1988
- USDA increased its forecast by 240 million bushels due to greater expected plantings, leading the U.S. growers to produce 15.1 billion bushels of corn this season and haul in average yields of 181.0 bushels per acre
- On the demand side, sluggish global export demand, particularly with US shipments trailing Brazil’s, intensified competitive pressures, contributing further to the price decline
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Exports growth seems to decrease, soybeans at 2-month low
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- Active soybeans contracts plummeted to a 10-week low below the $11.35 mark, losing -10.9% on YTD basis, driven by ample supply and weak export demand
- Prices hit after the USDA reported that crop condition ratings had improved beyond analysts’ expectations
- Moreover, favorable growing conditions are expected to lead to a substantial US harvest, while ongoing harvests of South American soybeans are adding to the market supply and pressuring prices downwards
- In Brazil, soybean plantings are expected to rise 1.9% higher to 116.9 million acres
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