A potential ridge is developing in the Central plains that could bring hot and dry conditions to the mid-west. There are conflicting forecasts on where this ridge will set up which has traders on edge. If it sets up over the US corn-belt, we will see the markets test their old highs. If it sets up further to the west we will see normal temperatures and more rain in the corn-belt. Traders will be watching weather forecasts closely today and early next week for the latest updates and we could see dramatic swings in the market with each forecast.
Countries have wasted no time in retaliating against new tarrifs from the US yesterday. The EU released a list that includes jewelry, automotive glass, bourbon and blue jeans. Mexico will target port bellies, fruit, cheese and flat steel. Canada says it will match the new tariffs dollar for dollar on a wide range of goods. NAFTA negotiations are breaking down after the US insisted on a 5 year sunset clause.
With crop conditions at record highs in the G/E category, it is going to take weather scares for this market to move higher. We are still a long way from the finish line but if weather doesn’t give the bulls reason to trade we could see this market struggle to maintain current levels. I am still in the camp that we have another 10-20 cents to the upside, but am banking on at least one weather issue for that move.
Have a Safe Weekend.