It’s getting a little tougher to feed the bull every day with cooler and/or wetter than normal weather in the Heartland. Wheat quality is slipping quickly given the moisture but, we’re at the point where hot and dry might be what’s needed to hurt the bean and corn crops. Normal temperatures and slightly wetter than normal conditions might not be hurting the crops yet, we are starting to look at the growing degree units and the likelihood of having some more problems with corn as the growing season comes to an end. We will be on pins and needles through September!
Crop progress figures are released tonight and it feels as though we have passed the point of caring how the government measures the issue. We’ve got problems and it’s not that relevant whether the planting figure for corn is 87 million acres and beans at 84 million acres in Friday’s report. Funds have turned from short to long and we are at prices which are attracting South American grain to our shores. What keeps are rally going after Friday’s figures is the weather and the weather needs to turn hot and dry to generate speculative buying in July and August. Then cool and dry gets the market excited in September. The winter wheat harvest can use s little window of hot and dry and Mother Nature has made harvest a little difficult. Quality is suffering but, the world doesn’t care as things look good in Europe. But, spreads may be very volatile in the next few weeks as we’re in the heart of harvest and end users may get a little anxious and start paying up, via the basis, to attract decent quality. It might be a year where wheat, a lot of wheat, get’s fed!
Respect the USDA! It’s also first notice day on the July futures and the end of the quarter on Friday. As usual, we preach the Gospel of going into USDA crop reports as even and open minded as possible!
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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