- Chicago markets are seeing something of a “turnaround Tuesday” with corn, wheat and soybeans all trading lower into the close on continued strong volume. Corn’s decline was on the back of chances of drier weather and improved planting progress across the N Plains and NW Midwest towards the end of this week and into the weekend. However, the bulls (unsurprisingly) continue to push the millions of acres of drowned crops and need for replanting. Yes, there are many acres underwater in the S Midwest, and as a consequence of cool and cloudy/wet conditions corn planting progress is stressed to say the least. Additional rains of ½-3 inches are most unwelcome and could well lead to further replanting or abandonment. There is downside potential in corn prices, but at this time we see it as limited until weather conditions become more favourable.
- This springtime weather has clearly been less than kind to the US grower, and as a result we are not suggesting any lasting bearish price trend will be in place until more is known about yield potential, planted acres and what is enrolled into the prevent plant programmes. This latter point is perhaps more relevant this year than in many previous seasons.
- S American farmers are not selling stored soybeans or the pending new winter crop corn as talk of adverse weather for the US farmer breed expectations for higher prices. China has continued to secure S American soybeans on a measured pace due to negative crush margins.
- It feels as if we are at a pivotal point in markets at this early stage in the season. A close eye on weather and prices is strongly advised going forward.