- Corn planting in reported to be 94% planted, up from last week’s 86%, and above the five year average of 92%. Soybeans are 73% planted, better than expected and up from last week’s 56%, and above the five year average of 66%.
- It has been a “Turnaround Tuesday” in Chicago today – even though it is Wednesday! The second trading day of the new, post-holiday weekend has seen markets turn higher in a fairly typical turnaround manner. Soybeans have led the way with premiums in Brazil firming and a rising US Gulf new crop basis. Perhaps Tuesday saw wheat oversold, and corn follow, and today is simply a matter of correction. An additional input could well be the start of a new month, and the new money that flows inwards may well be assisting upside.
- Amid rising crop potential in the US and Canada, favorable rainfall in Eastern Australia, and even the potential for higher feed wheat supplies in W Europe, the global cash wheat market continues to work towards levels that attract higher feed use. We are sceptical that a dramatic shift in feed use or diets will occur in the US, but Asian importers will be increasingly eyeing wheat to replace corn, particularly following the recent rally in S American fob price levels. The graphic below charts spot wheat futures’ premium to corn. The looming N Hemisphere wheat harvest is expected to weigh on global corn prices into mid-summer.
