We’re a few minutes after the report on grains inspection was published. The data could be used a good predictor of trends in exports. Trade reports are important especially for non-investment commodities as they show if there’s an oversupply on the market. Today’s prints shouldn’t have a significant impact on grains, but could confirm if the sharp upward move from last week is justified.
We could see a YoY improvement in wheat and soybean, but it must be said that this data tends to be volatile. An important thing is that the improvement can be noticed in each grain. source: Bloomberg
Soybean could rebound on seasonal factors. source: Bloomberg
Imports of soybean from China continues to rise. What’s more, the market share is now similar to the one from Brazil, which confirms a strong expansion and gives a chance for another leg higher on the commodity. source: Bloomberg
Corn is another commodity to watch. It has risen to the highest level in a year, but there’s a chance that the move will continue. Weekly exports fell to seasonal low, so a rebound is likely in the near term. That could support prices.
Seasonal factors are taking their toll on corn exports. source: Bloomberg
It seems that the data on the quality of crops should be more important for the market, with the biggest focus on wheat and corn. The latter has seen an improvement recently while expectations were that further deterioration is likely. Nevertheless, it still seems that a deficit on the market could be observed in the future.
The quality of corn crops is rather low, but is starting to rebound. source: Bloomberg
Let’s turn to wheat. Recent surge of the commodity was caused by a tragic data on the quality of crops, especially when it comes to the spring wheat. It’s the weakest in many years, which is mainly due to the lack of rain. That indicates that the harvest season could be weak, which should help the market to balance. On the other hand, the winter wheat doesn’t look such bad, but the situation on the spring wheat market could take its toll on the other type of the grain.
The quality of the spring wheat has fallen sharply. This was caused by the recent droughts. source: Bloomberg
The quality of the winter wheat is much worse than it was last year. A continuation of the trend could support prices in the near future. Thus, it’s worth looking at the upcoming data. source: Bloomberg