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John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Article / 10 April 2018 at 13:12 GMT

Grains pause ahead of WASDE report

Head of Commodity Strategy / Saxo Bank
Denmark

  • Wheat futures stabilise after Monday surge
  • Current weather conditions threaten US crops
  • Snow cover at multi-year highs

By Ole Hansen

US wheat futures have paused today after reaching a one-month high yesterday. The rally driven by fund short-covering came in response to the potential damage on the winter crop from current dry and cold weather conditions. 

The latest jump was attributed to the weekly crop condition report, which found that the percentage of US winter crops in good to excellent condition has slumped to just 30%, a 16-year low.

Winter wheat condition














The combination of US/China trade tensions and the ongoing weather woes have come at a critical time for US farmers, who are either watching their winter wheat production diminish or preparing to plant the summer crops. 


The cold spell and snow cover is greater than it has been for a number of years, as seen in the graphic below.


Snow depth

























Soybeans, meanwhile, have benefited from a record discount to Brazilian beans due to tariff fears.

Corn has also found support and although it is very early in the planting season, production potentially could be reduced with current weather conditions delaying planting and crop growth.

Up next is the WASDE report from the USDA at 1600 GMT.

Surveys are pointing towards a rise in US ending stocks for all three crops with the global outlook looking more supportive due to adverse weather-related drops in South American production.

WASDE for April













-- Edited by Michael McKenna

Ole Hansen is head of commodity strategy at Saxo Bank

1y
Pandorra Pandorra
Thanks Ole for cont. supports on grain / seeds market. Do you have any thoughts on Feed Grains Yearbook tables release (Apr, 13), could it push front ZW back to 450x levels?

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