Soybean futures, wheat futures, and corn futures have all retreated from recent gains after the USDA released it’s monthly crop production report this morning. They have once again raised their forecast on global grain supplies which continue to drive down food costs.
The USDA says the expanding crops are due to bigger than expected crops in both China and Europe. With the global forecast raised for soybean production, the USDA expects soybean inventories to peak-out at an all-time high.
“No surprise with today’s report…we knew corn, soybean, and wheat supplies are plentiful,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental analysis insight regarding the current grain futures situation. Craney added, “We also expect ‘left-over’ supplies of soybeans adding to next year’s harvest despite record demand for the product.”
Grain futures trends are all over the board, so let’s go over each complex: Corn futures trend is technically up, but appears topped out as of last month and due for a “double-bottom.” The soybean futures complex has beans at a crossroad (technical down in my work), soybean oil futures technically up, but appearing weak, and soybean meal futures technically up – but trading sideways for the past two months. Wheat futures trend is still up and I expect the market to resume up into next month (at best).
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.