• The lack of model agreement and the second slowest pace of soy seeding on record was supportive. We expect the pace of seeding to accelerate this week across the Plains and Western Midwest. Key thereafter will be whether soaking rains delay planting further across the E Midwest in mid-June. The GFS weather forecast is rather wet, but our expectation is that the drier EU model verifies. Planters are rolling today. Interior US basis is following seasonal trends, but has not been overly impressive on the rally, or at current Chicago values. An intermediate high in basis is expected in the next few days.

Interior cash prices in Southern Brazil have rallied $30/mt since early May despite a strengthening currency. Farmgate prices in Brazil are down only 7% from last year, vs. US losses of 15%. The trade is beginning to debate potential expansion in S America. We lean towards expansion of 3-4% as S America holds captive the world’s largest buyer. Nov futures will struggle above $9.35 unless US yield is threatened. Otherwise, price direction comes from S America’s cash fob market.

• Chicago corn remains stuck between competing weather models and elevated weather risk. The afternoon EU weather model keeps meaningful precipitation throughout the next ten days confined to the Delta/Southeast and parts of IL, IN and OH. Planting progress resumes elsewhere. Confidence in the wetter GFS solution is low. There is also strong talk that Southeastern feeders have purchased 40 million bu of corn from S America in recent days. Gulf corn’s premium to Argentine origin has widened to $22/mt ($.56/bu). This is the largest US premium to S American origin since 2013, when the US market was still reeling from the 2012 drought.

Final planted acreage in the US will be a combination of improved weather moving forward against various government inventive programs, both to plant and to leave acreage unplanted. We would suggest that Dec futures above $4.50 accounts for US crop loss of 1.7-1.9 billion bu compared to the USDA’s forecast. Downside is limited until the US summer climate is better known. Planters will be active in the West this week.

• US wheat futures ended lower, led by KC, on profit taking in the US and abroad. There are hints that better rain lies ahead in mid-June across Central Russia. We would point out that the EU weather model did not follow the GFS’s call for improved weather in Russia with its afternoon release. However, improved weather is forthcoming in Australia. US HRW crop ratings Monday afternoon were bearish.

European wheat futures have struggled this week, despite Russian dryness. The US rally has far outpaced those in other markets. It is unlikely that the US market will lead for any length of time as the US’s share of world trade has fallen sharply in the last decade. The rally was overdone without knowing more precisely the size of EU and Black Sea crops. Weather will maintain top priority in the near term. But like in the case of corn, the drier EU model forecast bodes favorably for US wheat.