Quarterly Outlook
Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
You can access both of our platforms from a single Saxo account.
Grain markets turn to WASDE for guidance
Ole Hansen
Head of Commodity Strategy
Summary: All four major crop contracts have turned lower ahead of today’s WASDE report which undoubtedly is going to provide some additional volatility.
Following one of the most spectacular short-covering rallies on record, US grain and soybean markets are now trading softer ahead of the monthly crop report from the US Department of Agriculture set for release today at 16:00 GMT. The World Agriculture Supply and Demand Estimate, or WASDE, report will provide the markets with the government’s latest estimates for how much output has been lost after months of rains and floods delayed or even cancelled planting across US growing areas.
Last week a small letup in the rain allowed farmers to make a final push to get as much corn in the ground while the progress for later planted soybeans also picked up. Some losses will occur, and today’s report will give us the first clues about the impact on yield, production and stocks at the end of the current 2019-20 season.
Last week a small letup in the rain allowed farmers to make a final push to get as much corn in the ground while the progress for later planted soybeans also picked up. Some losses will occur, and today’s report will give us the first clues about the impact on yield, production and stocks at the end of the current 2019-20 season.
A dismal planting season due to heavy rains throughout the US grains belt helped trigger a significant rally during the past month. Corn saw the biggest move due to a combination of a record short positions being held by funds and a record slow planting pace. Soybeans, which can be planted later, have so far been 60% completed and the rally has been less violent than the one that lifted corn due to ongoing Chinese demand concerns.
Wheat, meanwhile, has also turned lower following an initial scare about wet weather damage to the winter crop. The condition of the emerging spring wheat crop has been rated at 81% "good to excellent". Adding to the pressure on wheat have been reports that major competitors led by Russia expecting a significantly higher yield this summer compared with last year's drought-reduced output.
Wheat, meanwhile, has also turned lower following an initial scare about wet weather damage to the winter crop. The condition of the emerging spring wheat crop has been rated at 81% "good to excellent". Adding to the pressure on wheat have been reports that major competitors led by Russia expecting a significantly higher yield this summer compared with last year's drought-reduced output.
The spectacular race to cut shorts in US grains futures continued in the week to June 4. In just three weeks, funds have bought a record 510k lots of soybeans, wheat and not least corn, with funds having moved from a record short in April to a net-long of 108k lots last week.
All four major crop contracts have turned lower ahead of today’s WASDE report, which is undoubtedly going to provide some additional volatility. This is particularly likely in corn where the recent stampede to get long could trigger some long liquidation should the estimates turn out to be less bullish than expected.
Latest Market Insights
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
Quarterly Outlook
-
-
Quarterly Outlook
Q3 Macro Outlook: Less chaos, and hopefully a bit more clarity
John J. Hardy
Global Head of Macro Strategy
After the chaos of Q2, the quarter ahead should get a bit more clarity on how Trump 2.0 is impacting... -
Quarterly Outlook
Equity outlook: The high cost of global fragmentation for US portfolios
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: Commodities rally despite global uncertainty
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
Upending the global order at blinding speed
John J. Hardy
Global Head of Macro Strategy
We are witnessing a once-in-a-lifetime shredding of the global order. As the new order takes shape, ... -
Quarterly Outlook
Asset allocation outlook: From Magnificent 7 to Magnificent 2,645—diversification matters, now more than ever
Jacob Falkencrone
Global Head of Investment Strategy
-
Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
-
Quarterly Outlook
Equity Outlook: The ride just got rougher
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
China Outlook: The choice between retaliation or de-escalation
Charu Chanana
Chief Investment Strategist
-
Quarterly Outlook
Commodity Outlook: A bumpy road ahead calls for diversification
Ole Hansen
Head of Commodity Strategy
Disclaimer