- Chicago markets have been both volatile and mixed today with grains trading either side of unchanged and soybeans trading into positive territory.Volume has been sizeable as market players debate weather forecasts in the central US crop growing regions. Longer range forecasts are somewhat non-committed as far as beyond ten days is concerned and the bulls do not have a free run at further price upside, at least for now. More emphasis will be placed upon crop condition reports and yield forecasts until such time as there is better agreement in the longer range forecasts.
- Minneapolis wheat, the bullish stalwart in this latest run up higher, has traded a wide rage ($0.94/bu) today and, perhaps more significant, is forming a bearish reversal pattern and reversal of trend, which needs closing price confirmation before anything else. This is leading to some caution in both wheat and corn pricing today.
- US high protein wheat pricing and the current bull phase should provide a supply driven shock to prices, which should be followed by some demand rationing as prices escalate. It seems, right now, that prices have not yet reached levels that have created the latter situation Thus, our feeling is that we have not yet seen a wheat price “top” despite extreme overbought signals being quoted by all and sundry. It is more likely tat we will have to wait for autumn to begin before we see buyers digging deep into their pockets to secure supplies and driving prices to annual high levels. World cash wheat prices continue to rally as evidenced by Egypt’s latest GASC tender in which over 400,000 mt was secured. 60,000 mt was sourced from Romania and 350,000 mt from Russia, the season’s leading supplier to Egypt. The mid-August shipment slot was priced at a shade above $214/mt basis C&F.
- Current US weather predictions look to maintain warm and dry conditions with below average precipitation into the short to mid term across much of the western US. Soil moisture levels are in decline and there appears little change on the horizon until at least late July. As such we see see more upside potential than downside.