- It is probably fair to report that the corn market in the US is heavily short as we enter the heart of the N Hemisphere growing season, indeed, the funds are sitting on the second largest net short corn position on record. This does not lend itself to a bullish trend, however such a position does mean that in the event of a weather scare any rally will likely be more significant than would otherwise be the case.
- Soybeans closed down in Chicago today on the back of weaker S America currencies and early strength was quickly attracting sellers, which saw prices capped early on and pressure remained in place until the close. The weaker currencies continued to see further availability of supplies coming to market. The Argentine Peso has dropped to all time lows whilst the Brazilian Real is at a five month low.
- Some of the recently introduced weather premium in corn has been removed as fresh news is lacking and crop progress shows plantings catching up.The surprise is that the corn crop is so highly rated across the Delta and W Midwest which missed the recent flooding rainfall that affected so much of the cropped area.
- Wheat markets ended weaker on the back of the latest crop condition report and a somewhat stronger US$. EU wheat followed lower on the back of US crop ratings. Aside from this the market is seeing lower volumes and the lack of fresh news is clearly evident. US wheat’s discount to EU origins is clear to see, and is now, in the case of SRW, is the world’s cheapest milling origin, albeit of lower quality than some competing origins. Discounts of as much as $15 to Bench are evident today. It feels very much as if, without above trend line yields in Black Sea and EU cops, downside in prices are very much limited.New crop Russian offers appear to be close to levels we would view as being potential season lows and whilst upside may be a while in coming, there feels limited reason to search for significant further discounting right now.