- The morning saw sharp gains in Chicago markets as less than expected rain was predicted for the week as well as warm to hot temperatures. July soybeans saw $12/bu tested (but not reached) and July corn saw the 2015 spot high ($4.3875) also tested (similarly not breached). Wheat was somewhat less inclined to rally given the record large US and world stocks forecast by the USDA in Friday’s release.
- Latter trade was somewhat less robust than was maybe anticipated, lower than early trade. Fund profit taking ahead of prospective midwest rain this week and some issues/concerns over Brexit, which has prompted some suggestion that others may follow if Britain does indeed exit.
- It seems that corn is leading the market at it is about to enter its key pollination stage whilst soybeans are more tolerant of any prospective heat and/or dryness. It should be noted that such conditions are, as yet, not in the forecast and we are merely seeing some fairly substantial weather risk premium in pricing at present.
- Informa estimated 2016 US corn seeding at 92.566 million acres, below last month’s 93.376 million and USDA’s 93.6 million. Soybeans were estimated at 83.761 million acres, up from 83.006 million a month ago and significantly above the USDA’s 82.2 million. Total wheat acres were estimated at 50.2 million, above 49.994 last month. The estimates failed to move the marketplace.
- It is a yield and weather discussion going forward. US 2016 corn and soybean crops still holds a considerable amount of yield potential if cooler/wetter conditions return. However, the current pattern does give rise to some concern with soil moisture in fast retreat. It is difficult to be overly prescriptive until there is more clarity on the 2016 summer weather outlook.