Sat, 19 Sep 2020

CHICAGO, Aug. 8 (Xinhua) -- CBOT agricultural products maintained downward trends in the past week despite some sporadic rallies.

This is no place to turn bullish, Chicago-based consulting company AgResource warned.

Corn touched new contract lows as favorable Central U.S. weather continues to add to U.S. yield potential. Dryness lingers in Iowa, but record high yields across the Dakotas, Upper Midwest and Delta and rising potential in Illinois are noted.

Until the market knows just how big the 2020 U.S. crop is, a seasonally bearish pattern will persist, AgResource said.

The market thereafter will need to measure the need for future demand growth. Lasting recoveries will hinge upon South American dryness.

U.S. wheat futures ended sharply lower, led by fund selling. Seasonal trends in U.S. and world wheat markets are decidedly negative in August and early September, as a result of the rise in Russian winter wheat yields and the arrival of soaking rainfall in Australia. There is also talk that record Canadian wheat production is possible this year.

Wheat market needs to boost future consumption. It is estimated that Russia's exportable wheat surplus in 2020-2021 will be 36-37 million metric tons, the second largest on record, while combined exports in Australia and Canada will be a record 44-45 million metric tons, up 12 million metric tons from the previous year. AgResource admitted that amid economic difficulties in major importing countries and cheap corn, global wheat demand growth will be labored.

Soybeans touched weekly highs on Monday and then sold off throughout the rest of the week, driven by an increase in weekly crop condition ratings. Based on moderate temperatures across the Midwest, AgResource looks for steady crop condition ratings this week.

China continues to book large quantities of U.S. soybeans for new crop. New crop sales will likely be at or near record levels in the early weeks of the 2020/21 crop marketing year, and a record large export is expected in the first quarter.

For now, the market is primarily focused on the potential for a record-large U.S. soybean yield. With favorable August weather, U.S. soybean yields could reach records with a national average of 53-54 bushels per acre. AgResource noted in particular that the tensions between China and the United States need to be monitored.

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