Markets are started out slightly higher this morning with corn up 5 and soybeans up 10, but have since fallen with corn trading 2 lower and soybeans only up 4.
Last week we saw a dramatic selloff in the markets with old corn losing 87 cents on the week while new crop was down 94 cents on the week. Last weeks neutral to bearish report coupled with favorable planting progress and weather had the funds exiting their long positions. The funds ended the week long 215,000 contracts after selling off 115,000.
The southern third of Brazil’s safrinha corn crop should see showers provide some drought relief by the end of this week. The rains are coming in the late pollination period which should help curb production losses.
Weather in the US remains the key negative for the markets as gulf storms allow moisture to stream north. Things are off to a very good start with the US in both planting progress and weather. This afternoon’s crop progress should show corn 85%+ planted for the majority of the corn belt.
We are a long ways from having this crop in the bin, but producers should be actively making sales for new crop at prices that are very profitable. Most would agree that this market is significantly over priced and last weeks selloff is a reminder of how quick this could be gone. I would recommend being 50% sold on new crop corn.
Have a Safe Day!