Strong recovery of soybean, corn and wheat in Chicago – 20/05/2019

By Ricardo Pbadero / INTL FCStone

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The night at CBOT shows a strong recovery in soybean prices, with wheat and corn also in positive territory.

The market is starting to badyze in detail the potential for a smaller area of ​​corn and wheat, which would likely mean a larger area of ​​soybeans. It will be difficult for this market to descend below a fundamental bearish cloud. The concern over the delay in planting maize has a negative impact on oilseed prices.

As we approach "planting prevention" dates in corn, what does it mean for soybean planting? Additional options for the producer are to be able to plant soybeans after the date of prevention of corn planting and to be 100% covered by the soy insurance policy. In this case, there is no preventive payment for corn planting.

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The producer may also choose to wait until the end of the corn planting period, which is 20 days. Therefore, 20 days after the planting prevention date, farmers can plant another crop, such as soybeans. In this scenario, the producer acquires 35% of seedling prevention from maize and the soybean crop will be covered by agricultural insurance, but it is adjusted to the late sowing date. The producer can harvest and sell his crop normally. And, of course, there are also planting prevention dates for soybeans if the humidity persists until mid-June.

Can this encourage the farmer to stop sowing his corn and make the fundamentals of soybeans even more bearish?

The soybean / corn index has now fallen to 2.12 and will likely continue to lose ground.

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Council of US soybean exporters they are considering the loss of the soybean market after the trade war with China, even if an agreement between the two powers is likely.

Last Friday, the real saw a sharp devaluation against the dollar, close to 1.56%, which improves the competitiveness of Brazilian exports compared to North American exports.

Short-term and long-term forecasts remain wet. The market knows that there could be between 35 and 45 million acres without planting corn in Monday's report. The GFS system produced its weather forecast with relative humidity for the period of 5 to 15 days, which would lead us to the beginning of June.

Excessive moisture causes rumors of disease, rust being discussed in western Kansas. Climate models suggest a major storm early next week that could result in significant waterlogging in major winter wheat producing areas of Oklahoma and Kansas.

The demarcation of the temperature line in the forecasts says everything for the path of the storm. Will there be any potential for talking in the week of a high-pressure or drought-centric system in the Southeast next week? The climatic extremes observed since early January are continuing …