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June 22, 2023
The oilseed market is getting its colour back thanks to the weather risk premium, but domestic demand in Europe is still particularly gloomy. The rise of the financial markets is struggling to be replicated on the physical market and only a continuation of the bad weather conditions will turn this rally into a sustainable movement. The weather models are still largely showing dry conditions, but the harvests in North America are still a long way off. Volatility is likely to remain the dominant factor over the next few weeks given the uncertainty that still lies ahead.
The long-term bearish trend for cereals which began in February is taking a break against a backdrop of concerns about the weather in the northern hemisphere. The Corn Belt is experiencing a persistent lack of rain, with very dry weather again forecast for the next two weeks. The next few weeks will be decisive for the yields of these crops, particularly corn, as will the pre-autumn period which will bring El Niño to the southern hemisphere’s production regions.