Last week’s carryover estimates have the market’s attention potentially focusing the producer on the need for good wheat crops next year. Hence the increased talk in higher planted acreage for all wheat in the 21/22 crop year. Seven dollar prices for Kc and Chicago will do that in my view. The technical’ s show a potential double top on the weekly continuous Chicago wheat chart that has rallies fading and becoming selling opportunities. I think Kc vs Chicago is still an opportunity. I think given the Canadian news from Stats Canada this AM could open up the export window for Corn into Canada. That said I think the market will look to be building carries in Chicago and reducing carries in KC. That makes the long KC December and short Chicago December trade still a place to line up even though we are well off contract lows in that spread. We expect a wide swinging market led by the cash market trade and world weather events. But note today KC settled higher than Chicago. That hasn’t happened in a while. The Stats Canada grain and oil seed production report released this AM was viewed as bullish compared to expectation in my opinion. Year on year changes for Canadian grain are as follows. Spring wheat is down 41 percent. Canola production is 34 percent lower. Barley is down 34 percent and Oats down 44 percent. There is a possible scenario that Canada will most likely have to import more feed from the US, and that is not on the USDA balance sheet yet Estimates are being floated that the number would be between 100 to 200 million bushels of corn. Would that make last week’s low at 4.97 a seasonal bottom? Time will tell as harvest has started. KC/Chicago wheat chart included.
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