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Senior Contributor

The fundamental cards

They are Argentina and China. These are trends that I won't attempt to quantify, but trends none the less.

 

The consistent story in Argentina is hot temps during pollination of corn and the idea that rains so far are not sustaining unless the rain trend continues and temps fall. There are already plenty of predictions that the corn crop potential has been damaged and limited.

 

I'm guessing that the China drought in wheat country is now being looked at seriously. It is a dry area anyway and depends on irrigation. But percip down 84% in their most productive province is an issue. Yes, China has had repeated issues of dryness for years and gone ahead and produced normal crops and preserved inventories. Maybe this time it won't turn out the same. The persistent rumors that China has drawn down corn stocks is being noted, though I think they would stay out of the corn market until they are sure they can't maintain adequate inventories - at which time they hope that world production is up and they will cause less market distortion than if they were to start buying large amounts now. The domestic economic policies will have a marginal effect on soybean purchases. They could slow, but not fall year on year IMO.

 

I believe we are on track for increased volatility going into N American planting.

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Senior Contributor

Re: The fundamental cards

Hey, Palouser. Just got a report in from one of our friends down in Brazil who's been hearing from farmers in Brazil. Drought's sure weighing on things despite some good rains in a lot of spots over the last few days. On top of that, they're starting to see some more disease and bug pressures. But, despite it all, there are still some acres that aren't looking too shabby. 

 

We've got some more information coming from Brazil tomorrow on the crop conditions there. I'll let you know when we've got it all up on the site.

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Veteran Contributor

Re: The fundamental cards

Looks like we are watching the wrong markets today.  Read notes from an interview with Jim Rogers over the weekend, he is still very bullish ag commodities.  Said the Wall Street guys would be driving tractors for a living for the farmers...(so I guess he is NOT bullish the S&P. or they won't be smart enough to short it at the right time).  He said to buy RICE.  Rice is up the fifty cent limit today.   Was it fundamentals or traders just following Rogers?  

 

While I appreciate the reports from Argentina, after the Russia and US crop projections big miss...take some of it with a grain of salt.   The weather trend is for short crops. 

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Veteran Contributor

Re: The fundamental cards

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Senior Contributor

Re: The fundamental cards

The drought in the heart of China's wheat country is having little impact because of moisture in the soil from last fall's rains, according to the China Meteorological Administration.

 

So, at this time it appears the main affects will be drinking water, though it doesn't clarify how much of irrigation needs the developing crop will depend on affected surface water.

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Senior Contributor

Re: The fundamental cards

As far as South America, while things are a little more challenging for the crops in Argentina right now, things are for the most part looking pretty good in Brazil. Here are a few snapshots from the crops there that I promised yesterday. 

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