Markets are sharply lower to start the week with corn down 30 and soybeans down 50.
The markets are selling off based on a significant change n weather forecast for the coming weeks. There is heavy rain in the forecast for the Central US. Amounts of 2-3 inches are forecast for Iowa, Illinois and Indiana. One private forecast has rain starting on the 21st of June and rains every day until the end of the model run on the 27th. If this proves true, the crop will be in very good shape from these rains.
There also appears to be pressure on the markets from the potential change in biofuels policy. The refiners are balking at RIN prices as you would expect. The rollback and or potential denying of small refiner waivers granted during the Trump era is partly to blame for high rins, but also the extreme volatility of gasoline supply and demand over the last 15 months is certainly playing a role. In a recent round of discussions “senators discussed options like a nationwide general waiver exempting the refining industry from some obligations, lowering the amount of renewable fuel refiners must blend in the future, creating a price cap on compliance credits, and issuing an emergency declaration.” This is a tough spot and real test for the current administration as it tries to appease the Ag lobby and the Energy lobby all the while running on very green, environmentally friendly platform.
This is only the second day down since corn made the high last Thursday. It looks like free fall until we hit the 5.40’s. If it rains, we may slide all the way back to the previous low of 5 dollars. The weatherman is in charge of the market now and things change quickly.
Have a Safe Day!