Corn appears to be underperforming today! Has planting panic subsided? Expectations are for the USDA to put corn plantings at 90% and beans at 80% in this afternoon’s progress reports. Winter wheat harvest has been slowed by wet weather while spring wheat is starting to get a little thirsty as it’s been a little dry in North Dakota and the Canadian Plains. Wheat conditions has slipped yet, the extent might be measured more so with basis levels than subjective government observations.
Supply is a concern, specifically for corn but, we’ve to look at demand and the market is looking at increased imports from South America as well as wheat working into the feed ration. Things may get tight yet, there’s enough corn and wheat around for a copy of months which could keep spreads wide despite the recent run up in corn basis.
First notice day against the July futures is June 28 and we must remember that speculators flipped from short to long the past thirty days which may keep July under a little pressure as deliveries approach. River delivery is going to be a lesson for those who choose to take it. High water, receipt shopping and swapping and all the other little surprises might make bringing up Brazilian corn a lot more feasible!
Wheat quality is a concern and if it keeps on raining basis levels may get goofy. It’s a day by day consideration. Spreads can get very volatile.
Beans are starting to become a concern as we’re at the Summer Solstice this week and yield potential may start waning. But, there are a lot of beans in the world and above$9 there’s more coming in the southern hemisphere. Spreads might have a tough time strengthening!
The information contained on this site is the opinion of the writer and obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in current market prices.
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