Feb 18, 2021

Markets Quietly Mixed Looking for Direction

Drier outlook for Argentina; Australian crop estimates increased

Drier Outlook For Argentina

  • Rainfall this month has been less than half of normal in the heart of Argentina and also in La Pampa and western Buenos Aires.
  • Subsoil moisture is still rated favorably after significant late January and early February rainfall.
  • Temperatures over the past week were near to below average and readings for the past 30 days were also below normal.
  • Topsoil moisture is rated short to very short in La Pampa and Buenos Aires while marginally adequate to slightly short from Cordoba into Entre Rios.
  • Over the next week temperatures are expected to be above average and rainfall will not be more than 0.60” in many areas.
  • Net drying in many areas in the next ten days will lead to a more significant decline in soil moisture and rising crop stress that could threaten late season soybeans and corn.

FBN’s Take On What It Means : The trade will pay close attention to conditions during the next two weeks. One or two good rain events might be enough to carry many crops to the end of the growing season without much threat of lower production. However, without some significant precipitation, Argentina is probably going to be faced with a little more yield loss potential.

FBN
FBN

Australian Crop Estimates Increased

  • ABARES increased its estimate of the Australian wheat crop to a record 33.3 million tonnes from 31.2 million in December.
  • Production is estimated to have increased by 120% in 2020/21 while beating the previous record of 31.8 million tonnes in 2016/17.
  • USDA last estimated the crop at 30 million tonnes in its February report.
  • The barley crop increased 45% from 9 million tonnes last year to a near record 13.1 million tonnes, and up from the 12 million previously estimated.
  • The canola crop estimate was raised to 4.1 million tonnes from 3.7 million last month, up 74% compared to last year’s 2.3 million.

FBN’s Take On What It Means: The 2 million tonne increase in wheat stocks will likely affect Australian shipments later this year as additional tonnage goes to its exportable surplus. This will help to keep a lid on export prices as the world balance sheet is not as tight for wheat.

FBN Market Advisory services are offered by FBN BR LLC, dba FBN Brokerage, FBN BR and FBN Market Advisory (NFA ID: 0508695)

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Kevin McNew

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Magazine

Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014