Crop prices could be in a period of weakness until some weather scare develops, as it often does sometime during the Northern Hemisphere’s growing season.
However, attention is now fixed on the bumper harvest that Brazilian farmers are gathering.
The U.S. Department of Agriculture last week increased its forecast for Brazil’s soybean crop to a record 108 million tonnes, up four million from its outlook last month and two million more than the trade expected. Last year it harvested only 96.5 million tonnes.
The USDA kept its forecast for Argentina’s soon-to-be harvested soybean crop steady at 55.5 million tonnes.
The department said competition from the big Brazilian crop, of which 56 percent is already harvested, would slow American soybean exports in the last part of its crop year.
Soybean futures prices fell, wiping out the gain of the previous week that had been linked to speculation about changes in U.S. biofuel policy.
The USDA also raised its forecast for Brazil’s corn crop and adjusted its wheat numbers to reflect the record-smashing crop in Australia.
So Southern Hemisphere crops are huge and adding to global oversupply and in the Northern Hemisphere there are no serious weather concerns threatening the potential of 2017 crop.
That means downward pressure on the price of most crops, although the very tight supply of canola might mean it will perform better than other grains and oilseeds.
About the only concern is dry weather in the hard red winter wheat states, especially western Kansas and Oklahoma and that could be solved by a nice spring soaker.
The three-month outlook for the southern U.S. Plains and Midwest is for warmer than normal conditions but normal precipitation.