- Prices in Chicago are mixed today as markets appear to have returned to their previous ranges. Wheat is at the top of its range as funds continue to cover their short positions, however corn having covered the majority of the structural and longer term short position has the potential to ease lower. Adverse weather conditions will be required if funds are to turn net long on a large scale. Traders are looking for improved crop ratings tonight on the back of rain last week.
- EU wheat harvest estimates are in decline, but depending on who you talk to, the size of the decline varies. Some peg losses at no more than 1-2 million mt while others see the loss at 3-4 million. WASDE pegged the EU wheat crop at 150.75 million mt in the June report, so most see the crop as ranging from 149-147 million mt compared to last year’s harvest of 145.5 million. Remember, WASDE sees EU wheat opening stocks at just 11 million mt, which would likely reduce 2017/18 exports to 28-29 million mt. The EU corn crop size is also critical this year to determine the amount of wheat needed for feed. Losses of the EU corn crop cannot be tolerated without Black Sea corn imports, clearly feed supplies within the EU are tightening.
- Heat and dryness is embryonic across the Plains and growers are concerned that it will shift east with time. Not everyone in the Midwest received good rains last week and the forecast is not offering much relief over the next ten days. June will end up being drier and warmer than normal, making July weather highly important to US corn yields. It is still far too early to turn overly bearish.