roulettehowtoplay| Is the outlook for commodities stable due to the release of the USDA report in May and weather disturbances?

Source: CMEGroup of Zhi Merchants Institute

Price changes this week

Wheat and corn prices closed higher this weekRoulettehowtoplayThe price of soybeans remained basically unchanged. The rise in the price of soybean oil supported a significant rebound in the price of oil stocks.

The USDA's latest report does not come as a surprise, in line with market forecasts, suggesting that the outlook for these commodities is stable.

With the sowing going on, the weather forecast becomes more and more important. Any major weather disturbances in the coming months are expected to cause significant fluctuations, depending on their impact on crop growth and the closeness of the balance between supply and demand.

The latest trader commitment (CoT) report highlights the fund's aggressive purchases of soybeans and corn, adding to the bullish sentiment in these markets.

Although the market was generally stable, weather-related disruptions exacerbated price volatility, with wheat in Kansas and the Black Sea significantly affected, while torrential rains affected soybeans in Rio Grande.

Net position of soybean controlled fund (contract)

Looking ahead, the market focus is likely to shift to planting progress and weather conditions at this stage, and then to the key months of July and August, which will largely determine yield outcomes.

grain

In the wheat market, wheat prices have risen sharply as a result of increased supply risk premiums under global adverse weather conditions.

The frost in Russia, coupled with a prolonged drought in the Black Sea region and the deterioration of crop health in Western Europe, highlights the fragility of global wheat supplies.

According to USDA forecasts, if adverse weather reduces production in the European Union and the Black Sea by another 7 million to 1000 metric tons, it could exacerbate the tightening of global and exporter balance sheets in 2024, with inventory usage ratios in exporters likely to hit an all-time low.

Weekly trend of CBOT Wheat Futures (ZW)

Although USDA estimates for HRW wheat production have risen slightly, market developments suggest that price peaks may soon be established, depending on upcoming weather patterns. Some experts estimate that the output of Kansas is as high as 7. 7%Roulettehowtoplay.500 million bushels.

In addition, the competitive gap between Kansas HRW and Russian wheat quotations continues, which may eventually require price adjustments to stimulate export demand. At the same time, the potential impact of the Russian frost remains uncertain; however, favorable weather after Frosts Descent could improve production prospects. Looking ahead, the focus will shift to growth conditions in the northern hemisphere, where ideal weather is crucial to easing summer wheat prices.

Corn futures hit a three-month high, boosted by upbeat data from the USDA's May WASDE report and US export potential.

With global corn supplies peaking in 2023, production in major exporters is expected to fall sharply in 2024. The domestic situation also remains positive, with corn stocks and yield estimates for 2023 and 2024 showing strong data, which may be supported by favorable weather conditions.

Weekly trend of CBOT Corn Futures (ZC)

The domestic situation also remains positive, with corn stocks and yield estimates for 2023 and 2024 showing strong data, which may be supported by favorable weather conditions.

It is worth noting that the bad weather in Argentina and Brazil increased the supply price premium, highlighting the importance of the upcoming weather forecast for the US market.

The USDA's forecast for crop trend yields in 2024 gamble 2025 further reinforces the positive outlook, provided weather conditions remain favourable.

Market dynamics are also affected by a large number of fund activities, short positions significantly reduced, actively buying.

Looking ahead, the market will still keep a close eye on the weather forecast for July, which is crucial to determine production and overall production prospects. In addition, planting progress in the eastern Midwest is being closely watched, and a timely weather window is critical to maintaining the planting plan.

Oilseed complex

The soyabean market experienced a significant rebound earlier this week, but the rebound eased before the USDA's May WASDE report.

The report did not significantly deviate from expectations for 2024 Universe 2025, which helped to ease some market pressure and support the price rise after the report.

Adverse weather forecasts for Rio Grande do Sul suggest potential crop losses, which could affect short-term market dynamics. It is currently estimated that the damaged crops are between 1 million and 4 million metric tons.

Weekly trend of CBOT soybean futures (ZS)

The soybean meal market, supported by harvest delays and slow crushing rates in Argentina, has boosted US soybean meal exports. Brazil's soyabean harvest is nearing its end, in stark contrast to the slowdown in Argentina's soyabean harvest, raising concerns about short-term soybean meal supplies.

Speculation that the United States might impose a tax on imported waste cooking oil has also pushed up the price of soybean oil, reflecting the increased use of soybean oil in renewable diesel.

As planting progresses, weather-related market risks may increase, and Chinese demand may play a key role in future market adjustments.