Commentary
There is a lot of noise in the market among crop scouts and so-called industry experts saying there’s a higher probability that the US loses corn acres if it’s not 30% planted by the end of next week and 50% by Mid-May in my opinion. There are also rumors swirling that North Dakota needs to be ten percent planted by next week or its very probable that between .5 and 1.5 million acres of corn will be lost to prevent plant. Does anyone remember the late planting in 2018 that ultimately resulted in good yields by the end of that growing season? The good news for producers is that starting Saturday, the Eastern Corn Belt will see little rain, warmer temperatures and faster drying rates according to World Weather Inc. “Planting should quickly increase once the ground firms up after rain comes to an end Friday” according to the weather site. They also noted that Brazil’s northern corn areas continue developing under a dry pattern with all material rains expected in the lower half of the growing area. Brazil corn basis jumped 10 cents/bushel yesterday.
Wheat rallied approximately 30 cents today. Many countries previously counting on Ukraine for wheat shipments turned their focus on India in recent weeks, hoping that it could help fill the deficit in the supply. However, that looks a bit less likely after recent reports that India’s wheat production is falling short of expectations. Hot temperatures in March hurt the crop as it was going through the critical grain fill period of development, reducing yields. India cut its 2021-22 wheat production forecast to 105 MMT from an earlier projection of 111.3 million metric tons. Despite the cut to production, India’s food secretary told Reuters, “there is no move to curb wheat exports, as the country has sufficient stocks of wheat.”
I included a Dec 22 wheat vs Dec 22 Corn spread below. I don’t have a trade idea yet but in my opinion I would watch any close above or below the trend lines. In my opinion there is a $1.50 to $2.00 move coming, I’m just not sure in which potential direction as of yet.
Trade Ideas
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Options-N/A
Risk/Reward
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