US markets hit new contract lows briefly, as USDA paints a bearish picture in their latest S&D's.
USDA places 2019/20 World wheat carryover at 293mmt, 16mmt above trade expectations.
Global wheat production for 2019/20 estimated at a record 777.5mmt, up 45mmt on this season (well above trade estimates - IGC 762mmt). Of this EU production expected to rise 16.5mmt.
US Corn ending stocks estimated at 63.13mmt for next season, up 9.9mmt year on year. Sharply outwith trade expectations of around 54mmt. Global corn production also increased by 15mmt to 1134mmt.
US trade tariff hike with China goes ahead as the two sides fail to find agreement on Friday. $200 billion in Chinese goods thought to be affected.
US funds estimated net short -296k (corn), -163k (soybeans), -148k (Ch+Ks wheat).
Russian Ag Ministry announce intention to extend zero tariffs on grain exports for another year, with a large in rebound in production expected next season.
US Corn Belt planting remains problematic, with cold, wet weather holding up progress. Forecasts for this week are more settled with extended models pointing to a wetter pattern for the rest of the May.
Trade increasingly conscious prevent plant dates of 25th May-5th June edging closer and only circa 25% of the US corn crop has been planted to date.
US, EU, FSU, Australia and Canada all forecast for a large rebound in wheat production (per USDA) with growing conditions benign.
US/China trade pessimism combined with bearish data from USDA lead markets lower through the week, with little supportive news forthcoming to discourage selling.
The US corn plantings situation will be closely monitored, but historically plantings have caught up very quickly in a short period of time when conditions allow. US/China trade negotiations and Brexit will clearly continue to influence Global and domestic price direction, whilst the speculative sector is extremely short - offering some underlying technical support.
That said, weather is the focus presently and by and large that continues to be non-threatening - hence the negative market sentiment. While this remains the case, rallies may struggle to extend.