Chicago wheat spreads may be on the verge of giving up and carry might start working its way back in. May futures are dangerous and most traders should not venture into this shallow water yet as new crop harvest approaches the race is on to capture what premium is still there. Chicago still holds an unnatural premium to Kansas City and we may see a return to normal when harvest starts in mid May in the Deep South and central Texas. Moisture is still a benefit until the plant turns and then hot and dry becomes beneficial. The Monday progress reports could become more significant as we are starting to head and turn in the US. Continental Europe still looks good with wheat weather.
Corn is in the gut slot of plantings now and it appears as though we may still have problems in Minnesota, Iowa, South Dakota and Nebraska getting it in the ground. There’s still time yet, we are at the point where we start losing yield potential. Given ample nearby stocks and significant top and sub soil moisture there’s a cushion to cover this anxiety. Yet, we’ll need selling pressure for funds to take profits on short positions and the selling may not happen until we see forced selling at harvest if there’s storage problems. Given normal weather from this point on the funds could have this opportunity but it looks like it will be a very slow grind lower to and through pollination in July.
Beans are still the redheaded stepchild afterthought. We might see another year in which we add to carryover and that should translate to softer spreads.
Happy Easter! Watch the weather Sunday/Monday!
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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