Trade view /
02 June 2016 at 2:57 GMT
The wet season in Brazil is between February and May, with considerable year-to-year and decade-to-decade variability. In the west of the country there are reports of insufficient corn feed to feed poultry. Rationing has already been introduced. Much hope is being directed towards the “Safrihna” corn harvest in mid-June.
Sadly, the lack of rainfall during the grain-fill period has reduced projections for Safrihna. Recently the winter corn production forecast fell to 48.9 tonnes, down 10% from last month's figures and 10.5% lower than 2015 production.
There is little relief to be found in the US, as following the long weekend row crops have rallied as concerns grew that the dry weather in the Midwest, which is allowing producers to get their sowings finished up, could eventually become a problem.
The possibility of a drought in the US is accentuated by danger that the 2015-16 El Nino swings into a La Nina. This is a market that looks set to build in weather premium as a drought is heading toward the heart of the US growing region.
Source: www.investing.com Spotlight Ideas
Corn 10-year chart
Management and risk
Parameters: Corn July 16 ZCN6 US Cents/Bushel
Entry: Buy at 413.50
Targets: 423.08, 431.38,442.56
Time horizon: Medium-term
— Edited by Adam Courtenay
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