May USDA report

News list

The May USDA report is one of the most interesting, since beginning to publish first forecasts of the next marketing year, and the old stock of that final will be within acceptable error. Normally after the publication futures volatility rising and occasionally penetrate the permissible daily limit, leading to the close of trading. It happened yesterday, "driver" movement was the soy complex, which has led to the growth of all ag futures.

Reduced forecast soybean production in Argentina and Brazil by 3.5 mln. tons (with the world at 4.4 million.) contributed to the growth of export potential in the US, which remains the final 2015/16 marketing year reduced by 400 mln. bushels. In MY 2016/17 production forecast growth to 324.2 mln. tons, however, and consumption has increase by 10 mln. tons to 328 million. These figures should support prices in the long term, but the data may have a negative effect, because the price increase will contribute to escalating acreage compared with cheaper corn.

The decline in maize production in South American countries due to adverse weather conditions at 4 mln. tons almost completely compensated by other countries and stocks at the end of 2015/16 MY expected within 207-208 mln. tons, stocks in the United States are reduced by 59 million. bushels due to growth in exports and domestic consumption. But forecasts for 2016/17 MY somewhat disappointing for producers, because providing global increase production by 42 mln. tons to 1.0117 mln, that will certainly keep prices very low.

For wheat production expected growth of winter wheat in the US 15-year record – 1,427 billion bushels, in general, the total yield of all types of wheat should reach almost 2 billion bushels and ending stocks to rise to 978 mln. bushels. For the world as a decline in production of 7 mln. tons to 727 mln, which, incidentally, very much and completely cover the existing demand 712.6 mln. tons, which should lead to update inventory at a record 257.3 mln. tons.

The July contract for corn ended the last trading week with decline of 14.25 cents a bushel. Medium-term trend remains downward trading range of 351-407 cents per bushel. When it exit out of the nearest resistance levels will cost 4.11 dollars per bushel, the same level of support is near 3.48 dollars per bushel. The daily stochastic though near oversold level of 20%, still obstacles to further downward movement until-no.

July wheat contract CBOT was the leader of the fall - 24.75 cents per bushel. Long-term downward trend continued to be supported by speculators, however in the short term may be rise up because of futures below the oversold level. The nearest level of support from which the correction is to make the price of 450 cents per bushel

Contracts old crop soybeans were able to go up in price and left term trend in an upward direction, but a large number of open long positions may lead to correction in prices due to profit-taking by traders. The reasons for closing positions may be falling relative strength index and MACD histogram reduction in weekly range. The level of support - 10.96 dollars per bushel, seeks support area 10.00-10.08 dollars per bushel.