- Trading in Chicago at the start of the week has been mixed with limited direction. It seems that traders are awaiting more clarification on where central US weather patterns are going before committing to fresh positions. Of note was the continued increase seen in Minneapolis wheat premiums relative to other grades. US farmer cash selling of corn and soybeans is slowing quickly as they consider the change in growing conditions from cool and wet to warm and dry. An unusual pace of drying soils and hardpan formation on the back of “ponding” following spring rains has led to some increased concern over corn and soybean crops’ ability to root down unless normal, or near normal, rainfall returns, and soon. That said, the funds remain resolute in their massive net short positions, and technical chart patterns leave little near term indication that corn or wheat are about to break from current trading ranges. Meanwhile soybeans and soybean meal charts remain in technical downtrends.
- Funds holding net short positions may well be starting to be getting somewhat impatient that profits are not rolling in particularly as we are about to see the release of the June USDA report on Friday this week. Weather forecast models for the coming week or two hold limited agreement and are therefore somewhat less reliable. The UK general election outcome will doubtless play a major role in the future direction of £Stg and UK equity markets. How the week develops will be interesting to watch.