Outlook of agricultural futures market
Dynamics of export sales of corn from the United States better than previously thought, and problems with qualitative and quantitative harvest in South America also contribute to escalating sales from the US, which will reduce ending stocks in the country the results of MY.
Positive margin producers of ethanol and biodiesel maintains cash price of corn, sorghum and soybean oil. Negative interest rates and large infusion of funds into the global economy led to the expansion of the number of funds that invest in non-traditional risk assets including corn market and soybean complex. This supports the price of active subsidence, which is very likely looking the currently existing global balance of supply and demand. Do not forget about China, which wants to get rid of surplus products. It is expected that by the end of 2015/16 MY grain stocks remains the world amount to 495 million. tons (a record level), but still, as written last time, demand is also increasing and the ratio of stocks-to-use is not sufficient to refresh the perennial lows. So, are still questions about the weather in the next MY and such a comfortable environment that we see the last 3 years, is unlikely to be remained for a long time, but still put on worsening weather as the main supporting factor is not quite reasonable, and the effect of El -Nino goes into decline.
The July contract for corn could rise for the week to 3.75 cents a bushel, but corn market receives diverse signals continuing trend. On the one hand weekly closing support in the medium term, the current trend today, but failure to break through the resistance level of 4.11 dollars per bushel indicates weakness upward trends.
The July contract for soybeans rose by 9.25 cents per bushel, leaving term trend in an upward motion. Several times the contract failed to break through the level of 10.90 dollars per bushel which sharply rising sales and weekly stochastic above 90% only supports the actions of traders fixed profit.
Wheat weakest among grain market. Last week, the next fixed contracts fall 7 cents per bushel. Mid-term trend only strengthened the downward trend, and the next support level 449 cents per bushel. Histogram MACD near zero and its transition to the red zone only increase the pressure on the market by speculators.