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Good news for growers in June WASDE

Good news for growers in June WASDE

A deal with China could push soybean prices over US$10 per bushel

By Diego Flammini
Staff Writer
Farms.com

Cash crop producers should be cautiously optimistic following the release of the USDA’s June World Agricultural Supply and Demand Estimates (WASDE) report.

“It was finally a friendly report,” Moe Agostino, chief commodity strategist with Farms.com Risk Management, told Farms.com today. “Crop conditions are almost nearly perfect and crops are probably ahead of themselves, but it doesn’t mean the crop is in the bag just yet.”

A surprising update about soybean ending stocks could lead to higher prices.

The USDA projected 2018/19 ending stocks for soybeans at 385 million bushels. That number dropped 30 million bushels from the May WASDE.

Soybeans are currently trading around US$9.77/bu, Agostino said. And if a major soybean customer makes a substantial purchase later in the year, the markets could react in a bullish manner.

“If there’s a trade deal with China, (soybean) prices aren’t going to stay at their current rate,” Agostino said. “They’re going to go up to US$11 or US$12 per bushel. China isn’t buying beans right now, but the key is whether they buy in September.”

Corn markets have yet to reward producers for the lower ending stocks.

In the June WASDE, these stocks came in at 1.577 billion bushels, down from 1.682 billion in May.

Global demand is outpacing supply, which should give producers “at least US$4.00 per bushel,” Agostino said. Corn is currently trading around US$3.77/bu.

The weather forecast for late June and early July could also affect corn markets.

The “dome of doom” is expected to bring hot, dry conditions in the middle of the growing season.

“If you get dry heat in July through pollination, that’s going to do some damage to the crops,” Agostino said. “If we get all the rain now and nothing in July, that could be bad.”

Growers could also receive higher prices for their wheat crops.

The USDA estimates wheat production in Russia will be down 19 percent. The agriculture department also estimated EU wheat production will decline by one million tons.

Wheat is currently trading around US$5.34/bu. But lower projected U.S. ending stocks and global production issues could lead to higher prices for growers, Agostino said.

“By the end of June, we could see US$6.00 per bushel on the Kansas City market and around US$5.50 on the Chicago market,” he said. “There might be another 25 to 50 cents available.”

The next WASDE report will be released July 12.

For exclusive access to Moe Agostino's live monthly WASDE analysis and other risk management services, sign up for a free eight-week trial.


Trending Video

US “Flash Drought” Worst in 133-160 Years + Disease taking a Bite out of US 2025 Corn/Soybean Crops

Video: US “Flash Drought” Worst in 133-160 Years + Disease taking a Bite out of US 2025 Corn/Soybean Crops


A dry August and a “flash drought” in the ECB (Eastern Corn Belt) the driest top 10 to 15 years in 150 to 160 years (Ohio the driest in 133 years) plus disease is taking a bite out of the 2025 U.S. corn and soybean crops.
It's going to be an early harvest. This could be the start of the 89-year drought cycle that may have been delayed until 2026 as La Nina maybe returning.
The USDA September crop report is all about record corn ears and record soybean counts but the October USDA crop report will be about pod and ear weights.
Stats Canada reported higher forecasts for the 2025 Canadian Prairies all wheat and canola crops vs. last year based on satellite imagery but are they overestimating production?
The 2025 Great ON Yield Tour and Quebec crop tours are projecting corn and soybean crops below the 10-year average.
China's Vice Commerce Ministry Li Chenggang visits Washington this week as we continue to connect the dots is a positive sign towards a China/U.S. trade deal. But will U.S. farmers have a winter without China as they buy more soybeans from Uruguay/Argentina? U.S. Northern Plain soybean farmers are seeing red with flat prices at $8.97/bu!
U.S. corn exports on record pace up 99% vs. last year.
Fund short covering continues in corn futures bottom is in!