• It has been a mixed morning with wheat fund liquidation ongoing while corn and beans hold steady. Crude has extended its overnight recovery, with spot WTI up $1.10 and RBOB gasoline up $.03. Ethanol future are flat. Crude’s plunge did on the margin weight on emerging market currencies, but only modestly. Currencies in Brazil, Argentina, Russia and Ukraine are up today.

• Exporters this morning sold 148,000 mt of soybeans to unknown destinations for 2018/19 delivery. Exporters also sold 212,000 mt of corn to Mexico. Taiwan also secured one cargo of optional origin corn to be sourced from either the US or Brazil.

• The debate in the soy complex now centres on the strength of non-Chinese demand growth moving forward. The USDA of course has given only a fraction of China’s imports to the US. The US is expected to supply up to 85% of non- Chinese world trade. Whether this share of non-Chinese trade grows needs monitoring following the USDA’s massive cut to US soy export demand last week. Another downward revision is not anticipated. Rhetoric surrounding US-Chinese dialogue remains mostly positive. The issue heading into late Nov’s G20 meeting is now infighting between top White House trade officials. Ultimately it is President Trump that decides if the terms of any proposal are acceptable.

• The midday GFS weather forecast is much wetter in Ukraine and Southern Russia in the 8-15 day period. Heavy snow worth 3-12” is forecast through the period, which would imply a moisture equivalent of 0.50-2.00”. We do mention that neither the EU nor Canadian models include this pattern change, but no doubt a blanket of snow would be welcomed there. Contacts suggest wheat conditions are rather variable in Russia. There is a general consensus that much more moisture is needed prior to spring.

• NOPA member crush data on Thursday is expected at 170-171 million bu. This will again be a record for the month and up 6-7 million from last year.

• The midday S American GFS weather forecast is slightly wetter in Argentina in the 6-15 day period. Excessive totals are unlikely, but a series of light/moderate events Nov 22-25 will trigger accumulation of 1-2” across Buenos Aires, Santa Fe and Entre Rios, areas that have been inundated with rain since late last week. A more lasting period of dryness is desired. Favourable weather persists in Brazil. Drier conditions favor Southern Brazil, where it is needed. Daily showers persist across Central and Northern areas along with normal/below normal temperatures.

• Managed funds will be now likely be square in KC wheat following today’s break, while the Russian fob market cannot afford to go down amid rising interior prices.

• It has been a weak and largely macro driven day in Chicago. US wheat futures have led the way down following Monday’s surge, with some light calendar spread unwinding noted. It is just tough to ignore another $2.50/barrel collapse in US and world crude futures. US crude stocks have recovered 37 million barrels (10%) since mid-September. The number of US rigs in operation has been growing through the boost in stocks. Whether OPEC moves to cut production in early 2019 will be watched with interest. It has been a record breaking move to the downside in energy prices.

• The US$ at midday is down 400 points, but currencies in S America are also weaker. The Brazilian Real has posted a 6-week low, which along with falling fob premiums keeps Brazilian soy prices attractive. Otherwise, there is not much ag-specific news available. The trade expects US corn harvest through Sunday to have reached 87% complete, with beans at 91%. US winter wheat conditions this afternoon are expected steady to slightly lower amid the early arrival of winter. Just how much winter wheat is left to plant across the Southern Plains will also attract attention.

• US export inspections through the week ending Nov 8 included 45 million bu of corn (vs. 51 million the prior week), 13 million bu of wheat (unchanged on the week), and 48 million bu of soybeans (vs. 46 million). All were generally within expectations. For their respective marketing years to date the US has shipped 437 million bu of corn, up 86% from last year, 364 million bu of soybeans, down 42% from a year ago, and 342 million bu of wheat, down 21%. Recall bean shipments a year ago in Oct-Dec routinely hit 65-90 million bu. US exporters sold 277,000 million mt of soybeans for 2018/19 delivery to an unknown destination. Indonesia’s recent interest in importing corn was filled with S American origin, though other details are lacking.

• The midday S American GFS weather forecast is almost completely unchanged. Pesky showers will persist this week across Buenos Aires, where a majority of wheat is grown, but otherwise a welcomed drier pattern will be established across Argentina into the latter part of November. Soaking rain will be ongoing Brazil, with cumulative totals into Nov 27 estimated at 100-170% of normal. Vegetation health in Brazil remains well above last year amid rapid planting.

• Crude’s plunge has been astounding, and the break continues despite the market being the most oversold since the mid-1980s. However, ag supply and demand is most important over any lasting period of time. Grain prices will hold until favourable weather and acreage expansion is confirmed. The soy complex needs ongoing US-China trade dialogue to trade above $8.90, basis Jan.

• Chicago grain futures have extended the overnight rally, with Jan beans recovering from session lows. More attention is being paid to the abrupt weakening of calendar spreads in Chicago wheat, and today has the feel of a short squeeze. Non-commercial traders last Tuesday were short a net 65,000 contracts of wheat in Chicago. We estimate their position this morning was closer to net short 80,000 contracts.

• We would also mention that low temperatures across the Black Sea Region this morning fell into the low/mid-20s. Snow cover is absent. No snow is offered to E Ukraine and Southern/Central Russia over the next 4-5 days. Winterkill rarely impacts price, but freezing temperatures there will be added to excessive rainfall in Argentina, unwanted rain during Eastern Australia’s harvest, and ongoing drought across much of Europe and the Black Sea. Interior US wheat basis is firm, and in parts of the Plains rallied last week with first notice day approaching. Few, if any, wheat deliveries are anticipated. EU milling wheat in Paris has followed, with spot futures there up €2.25/mt ($.07/bu).

• Weekly US grain inspection are delayed until Tuesday. Corn inspections are expected in a range of 45-50 million bu, with wheat at 14-16 million and beans at 40- 45 million. The lag in bean shipments relative to last year will widen. Spot crude is up $.60/barrel, with more talk centered on a potential OPEC production cut in 2019. However, Brazilian ethanol prices this week have fallen again following Petrobras’ lowering of official gas prices in Brazil. Brazilian ethanol maintains steep premiums to US Gulf origin, but US ethanol exports are needed amid lofty stocks and tight production margins.

• The midday S American weather forecast is a bit drier in the 6-15 day period, but heavy rain (2-4”) will fall across North/Northeast Argentina in the next 24 hours. This system moves into Southern Brazil at midweek. Normal to above normal precipitation will continue across the whole of Brazil’s soybean belt into the very end of November. 16-30 day guidance also indicates a pattern of normal rainfall across Brazil during the opening week of December.

• In recent years, the US wheat market has often rallied into first notice day, a theme that will likely continue amid strong cash markets. Seasonal trends are also positive into the latter part of the month.

• The USDA November crop report offered a bullish surprise for US corn and soybeans, but a sharp rise in prior year Chinese corn and wheat production and stocks has created a downdraft following an early Chicago rally. The Chinese and world stocks increase does not change the outlook for US corn, soybean or wheat prices since they (China) are not exporters, but the algorithms  reading trading platforms took the world stocks as bearish-which created a whipsaw market.

• The world table below reflects the big revisions that WASDE produced in China and world end stocks. WASDE raised China’s 2018/19 wheat end stocks by 7.4 million mt to 143.6 MMTs – which now accounts for a record 54% of all world wheat stocks. In corn, WASDE raised China’s corn stocks to by a record 149 million mt to a record large 207.50 million mt. These huge corn stocks have been rumoured for years by the private trade. World 2018/19 corn stocks now stand at 307.5 million mt with China accounting for 68% of that total. We would note that China will not be exporting corn/wheat to the world marketplace. The big statistical supply/stocks increase is cosmetic in terms of what it means for US/world corn/wheat prices, which is why WASDE raised their US corn farmgate price and held soybeans steady. The US 2018 corn yield was lowered to 178.9 bushels/acre with production cut by 152 million bu 14,626 million bu. The cut argues for a further drop in US corn yield and production in January. A final 2018 US corn yield of 176-177 bushels/acre is reasonable. The US 2018 soybean yield dropped to 52.1 bushels/acre with production falling by 90 million bu to 4,600 million bu. This crop is 189 million bu larger than last year. A final US soy yield of 51.8-52.0 bushels/acre is reasonable. Chinese 2018/19 soybean imports were cut by 4 million mt to 90 million which dropped US soybean exports to 1,900 million, down 160 million bu from October,

• In world wheat, WASDE cut their Australian crop estimate by 1 million to 17.5 million mt and reduced their exports by 1.5 million to 11.50 million mt. WASDE did not alter Russian wheat production or exports, nor did they reduce EU wheat exports which were steady at 23.0 million mt. We would argue that WASDE is too high by 3-5 million mt on EU wheat exports based on strong domestic feed prices and an extremely slow start of the export campaign. And Aussie wheat exports should probably be lowered to 8-9 million mt. Major world wheat stock/use ratios are near a record low. Finally, the Ukraine corn crop was raised to 33.5 million mt. Ukraine 2018/19 corn exports where raised by 2 million mt to 27 million which caused the 25 million bu reduction in the 2018/19 US corn export estimate. The historical revisions of China corn, wheat and soybean production was due to their census survey last year. For years, private traders have argued that USDA was underreporting Chinese stocks. In May, WASDE toyed with the idea of producing a world balance sheet excluding China. Following today’s report, the time for such a report is now as China’s huge corn/wheat stocks mask the bullish tightening of other exporter/end user stocks which is occurring. This is no place to be turning bearish and making sales in our opinion. We do not see world wheat prices declining significantly, if at all, on this WASDE report and US wheat prices are competitive in the world export market. In corn, US yields are likely to decline farther, while the soybean market is oversupplied, but there is the late November G20 meeting occurring between US President Trump and Chinese President Xi. The lows for the day were likely formed on Algorithm fund selling as big increase Chinese stocks were announced. In the days ahead, firming grain markets are expected.

• WOW!  USDA and China travelled back to 2007 and found 149 million mt of corn that the Chinese had misplaced! World end stocks almost doubled. In soy, USDA reduces Chinese imports to 90 million mt from 94, and US exports were reduced 4.35 million mt (160 million bu), raising US end stocks 70 million.  Non-US exports were increased and world end stocks only increased by 2 million mt.

• It will take the world a while to digest the increase in Chinese stocks. Our opinion is that it will have little impact on current markets, except to take away bullish hopes of Chinese demand for ethanol and/or corn. The rest of the world has to live with shrinking year on year supplies of non-Chinese corn, likely requiring more US acres to slow the decline. We believe corn is well supported in current ranges. Soybeans likely trade the current ranges as well, the bottom end of the range is vulnerable if US/China trade talks are slow in making real progress.

To download our USDA data recap please click on the link below:

wasde-8-November-2018

• There is more than one way to eliminate a commodity surplus. The US cranberry industry, hit by Chinese tariffs that has benefited the Canadian cranberry industry, has agreed to destroy a quarter of its 2018 production. It is reported that 240 million lbs will be destroyed. For some reason that angers us even more over the stupidity of this trade war. It is said that some were piling soybeans on the ground in ND because they cannot move the harvest due to the trade war. We don’t know many who have piled soybeans outside and not later regretted it, but maybe they have it hedged. The cost doubtless flows back to the farmer. There is plenty of storage space due to the short corn crop. Elevators are not getting full and little/no corn will be stored outside. We heard told of an elevator in MN that had built outside bunkers that will now remain empty. We wonder if the USDA has been tracking a phantom corn crop in S MN/N IA that is not there, and think that the November corn yield could be a bullish surprise on Thursday. Back in 1993, when farmers knew they had a had a bad crop due to wet conditions it took until the November report that year before the USDA found out and reported how bad it was. Knowing that NE and others did produce record crops the USDA has them at records in too many places where the harvest was disappointing. Potentially in our opinion, the USDA IA corn yield is bushels too high. This is not 1993 but a reflection of it.

• The US and China may or may not be serious about putting an end to their trade war but China appears to be preparing for the long haul if an agreement escapes them. Informa says that Chinese pig producers are reducing soymeal in feed rations from 20% to 10-12%. These may not be the most efficient feed rations but will utilise what feedstuffs they have and can acquire outside the US. China boosted their feed grain production producing surpluses and they will re-balance domestic production toward more protein. They will also diversify their plant protein imports increasing imports of rapeseed, sunflower meal, palm cake and even peas while buying 80% of the Brazilian soybean crop. They are not going to settle on a trade agreement with the US because of any dependence on US soybeans. We believe that China has determined that it will make it to the next Brazilian soybean harvest without buying from the US and the early planting in Brazil will help them achieve that.

• Liquidation is the word of the morning as Chicago traders trim recent net long positions ahead of the November USDA crop report. Traders note that NASS has surprised the trade with larger than expected US corn and soybean yields in recent monthly reports. The average US November corn yield estimate is 180.0 bushels/acre with the soybean yield at 52.8 bushels/acre. This would be down 0.7 BPA from October on corn and down just 0.1 BPA in soybeans. Bullish traders argue that record or near record amounts of October rainfall and several strong wind storms caused an even larger US corn and soybean yield drop.

• Chicago brokers report that funds have sold 2,000 contracts of wheat, 3,400 contracts of corn, and 3,000 contracts of soybeans. In soy products, funds have sold 3,700 contracts of soymeal while buying 1,900 contracts of soyoil. It does not take much volume to push Chicago prices around.

• Colin Peterson (D-MN) will be taking over the House Ag Committee following the Democrats win of the House in the US Mid Term Election. Questions abound on the 2018 US Farm Bill and if Colin will ask for a rewrite. We expect that work eligibility rules for the SNAP program will be modified and that Peterson could push to lift the cap on the US CRP program. Right now, the 33-year-old CRP program is capped at 24 million acres. Rep Peterson has argued to lift the CRP cap and allow additional acres to return to the program to benefit wildlife and farm income. Yet, the US Congressional legislative divide will likely cause the current Farm Bill to be extended for another year.

• Russia has been exporting wheat like it will reach 50 million mt annually. Russia wheat exports look to reach 27 million mt by the end of the year. If the Russian Ag ministry limits wheat exports to 33-34 million mt, this would leave just 5.5-6.5 million to export from January through June. It is becoming obvious that the Russian Government will have to place some sort of restriction on trade to leave enough flour/wheat for their own population. How and when such restrictions are announced is being debated, but an announcement could come before year end. World wheat trade is equal to last year with millers having limited forward coverage. October 2018 world wheat trade was record large.

• The midday central US GFS weather forecast is slightly drier at midday with limited precipitation for the Plains and much of the Midwest into Nov 16. Any meaningful rain will drop across the SE and Eastern US. Several bouts of cold air will cycle southward with one bout on the weekend and another during the middle of next week. Arctic air builds across Canada and will likely cycle southward in the 14-20-day period. This is a cold and mostly dry weather pattern for the Central US heading into late November. The midday S American forecast features near to above normal rainfall for much of Brazil with frequent and heavy rains to start across Argentina this weekend. Favourable conditions will prevail with the only concern being for ripening winter wheat across Argentina.

• The USDA Nov report awaits traders on Thursday. US weekly export sales data will be overlooked as traders focus on US corn/ soybean yields instead. Traders expect that WASDE will cut its US soybean export estimate due to the tepid US sales pace. The big question is US corn yield and whether NASS cut it 1-3 bushels/acre. World wheat prices will likely hold firm on falling supply.

• Wheat has paced the Chicago morning rally while the row crops fell in corrective trading. Early jitters surrounding the US Mid Term election and sharp fall in crude oil futures offered a bearish grain tailwind. However, KC December wheat has pushed above its prior high at $5.1025 while active call buying has underpinned corn. The trade is betting on reduced US corn/soybean yields on Thursday based on several wind storms that lodged crops amid excessive wet weather during October. Whether wheat can close above key chart-based resistance will key trading heading into the report.

• Chicago brokers report that it has not taking much volume to push the market around. Funds have bought 3,000 contracts of Chicago wheat, while selling 1,000 contracts of corn and 1,800 contracts of soybeans. In soy products, funds have bought 1,200 contracts of soymeal and 1,000 contracts of soyoil.

• 83% of the Kansas winter wheat crop is planted through Sunday compared to a 95% 5-year average. Excessively wet weather and now cold temperatures are limiting new seeding efforts. Also, insurance dates of when the crop must be seeded range from October 15 in NW Kansas to November 15 in the SW corner of the state. As such, producers are losing their eligibility to get crop insurance due to late seeding dates and many farmers are abandoning their wheat seeding intention. We have trimmed our 2019 US all wheat seeding estimate to 48.6 million acres, which compares to the baseline estimate released Friday at 51.0 million acres. Research argues that a bullish story is brewing in US new crop wheat via reduced supply. The wheat market is also discussing reduced world production and that WASDE may have 2018/19 Australian wheat exports too high by 4-5 million mt. Cash connected sources argue that Australia will consume large amounts of wheat due to their ongoing large livestock herd. The Aussie cattle herd has held near record levels, even amid the dire drought. W Australian wheat is being exported to Eastern Australia amid the rising price of feed. A cut in the crop and expanded feed use could easily cut Aussie 2018/19 wheat exports to 8-9 million mt vs the WASDE forecast of 13.0 million.

• The midday central US GFS weather forecast is dry/cold for much of the Midwest. The harvest will slowly advance against the background of winterlike temperatures. Progressively colder temperatures will push southward with snows likely across S Canada and the northern quarter of the North Central US. The corn/soybean harvest will push to completion by Thanksgiving, but it is too cold to allow too much additional wheat seeding or germination. And the midday forecast for Brazil remains favourable with concern over too much rain for North Central Argentina.

• The results of the US election will have an impact on the US$. However, it is Thursday’s report and the G20 dinner between Trump/Xi which will determine long term Chicago price direction. We remain bullish of wheat on shifting world demand to the US, and the strong likelihood that US corn yields will come in below trade estimates of 180 bushels/acre. A close above $5.11 KC December wheat turns wheat price trends upwards.

• Chicago is mixed in moderate volume. Corn prices higher on lower yield bets while soybeans are little changed and Chicago wheat futures sag. The market lacks a directional feel with everyone discussing the potential result of the US Midterm election, Thursday’s USDA Crop report and what are the chances that the US/China reach a trade deal. The volume of Chicago trade spikes on the upside, and when the market sags, so does volume. End users will add to forward coverage on breaks, while the US farmer has not been a large cash seller. Seasonally, Chicago rallies into the Thanksgiving Holiday and with US/China trade talks ahead, we expect the market to follow this trend.

• The US exported 49.4 million bu of corn, 45.1 million bu of soybeans, and 12.0 million bu of wheat for the week ending November 1. For their respective crop years to date, the US has shipped out 389.7 million bu of corn (up 171 million or 78%), 315.2 million bu of soybeans (down 231 million or 42%), and 328 million bu of wheat (down 92 million or 22%). The US soybean and corn export totals were larger than expected, while wheat was disappointing.

• The average trade guess for Thursday’s November USDA report is a US corn yield of 180.0 bushels/acre (down 0.7 bushels/acre from October) and a soybean yield of 53.0 bushels/acre (down 0.1 bushels/acre). The yield declines were expected but may not be large enough following all of the rain across the W Midwest during October and resulting yield reductions. We would lean to a US corn yield of 178-179 bushels/acre and a soybean yield around 52.8 bushels/acre. Our lean into the report is for a bullish corn yield market response.

• Tweets and political decisions will be widespread in the coming days with US agriculture focused on trade. It is impossible to know what President Trump will decide on US/Chinese trade negotiations. The good news is that both sides are now in full discussion at a very high political level. That is something that could not be said during the summer or much of the autumn. However, it is doubtful that Chicago can sustain a break with short bought end users needing to take forward coverage, just in case, a deal is cut. Weather is also a big unknown in the ag business, but this year’s political uncertainty has added to the uncertainty and likely upcoming market volatility.

• The midday central US GFS weather forecast is drier and colder than the overnight run. Widespread rain totals of 1-2” impact the E Midwest, but otherwise, mostly dry weather conditions will prevail. Progressively colder temperatures push southward with light snows noted across S Canada and the northern quarter of the North Central US. Mostly dry weather will occur in the 9-15 day period with the final stages of the US harvest to occur. The time for a full shift to S American weather is occurring. The midday forecast for Brazil remains favourable with concern over too much rain for portions of Argentina.

• It is impossible to forecast changes in policy, and so we maintain our current, well documented, views. However, note that a US/China trade deal would produce a lasting bullish change for the US ag markets. We see limited downside in wheat/corn ahead of the USDA November report while January soybeans holds breaks below $8.65. Our longer-term favourite remains wheat on declining Russian/Aussie export potential.

• The CoT report showed a big week of fund selling in the Ag markets. Across the 10 principle markets, funds were sellers in 9 of them. Hogs was the only market that funds were buyers in through the week. The largest selling was in soybeans, followed by soyoil and then Chicago wheat. Funds still maintained a small net long corn position. Across all 10 markets, funds were net sellers of 107,000 contracts, and were net short 25,000.

• Fund short covering supported a strong soybean rally overnight, though gains were pared back by the morning open. January soybeans end the week $.30 higher and marked the second consecutive close over the 100-day moving average, which has not happened since May. Commitment of Traders data showed that as of Tuesday, funds had sold nearly 27,000 soybean contracts and had increased their net short position to just over 71,000, the most since last January. That heavy short position helps explain the two day, 35 cent rally. Hedgers on the other hand used the break in Chicago to cover hedges, buying back close to 30,000 contracts to take their net short position to just 3,600. With a hefty payment coming from the government, we expect US farmers will become more aggressive sellers on a further rally in the coming weeks. Ahead of the end of month meeting between Presidents Trump and Xi, we expect breaks will find support from fund short covering and end user pricing. The risks are that a deal is struck and US/Chinese soy trade resumes.

• Dec corn rallied 4 cents and moved through all major moving averages. The next upside target rests at $3.78, and fundamental support will be available into the release of the USDA’s November reports next Thursday. The USDA also released its long term projections earlier than expected. This is done mostly for budgetary purposes and so is of course not official. However, the USDA’s idea is that acres will rise but so will total consumption. Exports are kept above 2,400 million. 2019/20 stocks/use is pegged at 10.6%, which is not bearish. There remains pressure on next year’s weather and yield. Competition for export demand via aggressive S American/Black Sea offers will cap rallies. Expensive barley and feed wheat, and tight spot supplies will support on breaks. Beyond the Nov WASDE, S American weather, which is favourable, will be increasingly important.

• US and EU wheat futures ended largely flat on the day and week. Little fresh news was available, and all eyes will be on the Black Sea cash market next week, and whether interior Russian prices continue to move higher. Russian flour prices will attract most attention from millers and government officials moving forward. Otherwise, the USDA’s long term projection included all wheat seedings in 2019/20 of 51 million acres, up 3.2 million from last year. Total use is forecast up 46 million bu. US wheat end stocks in 2019 are pegged at 933 million bu, vs. 956 million in 2018/19, and which is neutral relative to current prices. We maintain that a secondary bottom has been scored. Russian prices are likely to move higher, which will boost US/EU market share into early/mid-2019.

To download our weekly update as a PDF file please click on the link below:

Weekend summary 2 November 2018

Our weekly fund position charts can be downloaded by clicking on the link below:

Fund positions disaggregated data

• Chicago futures are sharply higher this morning, driven mostly by optimism surrounding Presidents Trump and Xi meeting in late November in Argentina. Trump this morning tweeted he’s been in discussions with China, a central part of which has been trade. The market certainly doesn’t want to be caught short if a deal, or signs of a deal, gets done. Recall the issue in the soy complex isn’t so much ballooning US stocks, but rather much-reduced Chinese soybean demand as a whole.

• We estimate that managed funds this morning were short a net 72,000 contracts of soybeans, the most since January. Funds are estimated to be short 40,000 contracts of Chicago wheat and are net even corn. Our view is that a deal needs to be signed before one can turn bullish soybeans, but there is little for the market to do other than cover shorts when such news appears.

• US export sales through the week ending Oct 25 were mixed. Corn sales were a disappointing 16 million bu, up 2 million on the prior week but well below the average needed to meet the USDA’s forecast. Soybean sales totalled 15 million bu, vs. 8 million the previous week. Large cancellations were made by unknown destinations. China’s commitments have fallen to 960,000 mt. Wheat sales totaled 21 million bu, the highest since September. For their respective crop years to date, the US has sold 860 million bu of corn, up 28% from last year; 788 million bu of beans, down 29%; and 481 million bu of wheat. We would mention that wheat sales have been rising as the US Gulf market becomes more competitive. There is talk that excessive rainfall across the Plains in October (8-10”) will prevent any expansion in winter wheat acres there. The US balance sheets needs some measure of expansion to keep 2019/20 stocks above 750-800 million bu. Heavy rain impacts Central TX and parts of southern OK overnight.

• The EU/Black Sea forecast at midday is still dry. S American weather is favourable, with this season’s boost in Brazilian soil moisture to occur much faster than in recent years. The midday central US weather forecast is wetter across the Central Plains in the extended period, but these rains are expected Nov 16-17, much too far out to place much confidence in. Otherwise, too much rain falls across the Southeast and Eastern Midwest into next Tues/Wed. A welcomed drier pattern evolves thereafter. IN, OH and PA will be targeted with rainfall of 1.5-3.0” over the next 4-5 days.

• The world wheat market is beginning to pay more attention to changes in fob price relationships which increasingly favour the US and EU.