- Chicago corn and soybeans have posted new lows with Dec ’17 corn testing $3.70/bu support and Nov ’17 soybeans targeting $9.25/bu. US wheat prices continue to decline as funds sell whilst world cash prices hold firm. End users are scale down buyers, a sensible approach in our opinion, and spec buyers waiting to see how much rain falls before adding any fresh position length. Seasonal low prices are usually made around this time and Chicago wheat prices are now looking cheap particularly when compared to world fob levels. Key is whether, or not, spec liquidation in Kansas and Minneapolis futures is done for now.
- Many are questioning the amount of benefit to yield that will be down to rainfall across IA and IL after recent dryness. In the case of IA, 1st May to 15 August rainfall is some 1.2 inches below the 2012 drought year although temperatures have been lower. Regardless, corn needs water to produce a sensible yield.
- From the ground we are hearing that crop scouts are seeing corn ears with a reduced girth and that soybean plants are starting to abort pods in IA and IKL. Rainfall will doubtless help but we cannot help but remain sceptical over the August NASS corn and soybean yield estimates, September data will prove os right or wrong. The Pro Farmer tour will provide something of an indicator when they get going.
- Chicago is wringing out nearly all the weather premium from price with funds enterning a larger net short position in corn, soybeans and wheat. Funds are still exiting stale longs in Kansas and Minneapolis wheat. Our view has been not to chase this market lower. The wheat market is too cheap relative to fundamentals since Russia will only be able to export 29-30 million mt of wheat, no matter what the size of their crop.