US weather has remained the overarching influence on grain markets this week, but this time providing pressure rather than support as rains erode concerns of drought damage to crops.
Not that the threat of drought has gone away. Official weekly data on Thursday showed Midwest drought at its 12th most significant for any week since 2000.
However, the restart of rainfall, and runs of weather models suggesting further rains out to mid-July, has eased worries of crop losses to dryness.
The negative influence on prices has been particularly marked on new crop December-23 corn futures. Rains are coming just in time for the drought-sensitive pollination process which is a key determinant of yield, although there are ideas that, given the poor condition that crops have fallen into, that some damage is already irreversible.
We discuss more on these ideas, and the outlook for corn prices, in our weekly Grains outlook.
Soybean futures have fallen back too, although remaining well above end-May lows, with ideas that the lowest crop condition scores this century for the time of year also indicate some damage.
We discuss what market impact a weaker soybean crop might have in our weekly Oilseeds outlook.
This outlook discusses too the prospect for rapeseed prices, which are finding some late-week support, against a backdrop of crop uncertainty in major exporting countries, and resilient Chinese import demand.
Wheat futures, meanwhile, are stabilising after an early-week selldown encouraged by the retreat in corn. Wheat prices also remain up for the month, with the prospect a smaller-than-expected US corn crop raising the potential for a switch in some demand to other grains.
Last weekend’s Russian unrest also reminded of the geopolitical woes in the Black Sea, which are poised to come to a head again next month, which will bring decision time on renewal of the Ukraine export deal.