Good morning,
Corn and soybeans are back to selling mode with corn trading 7 lower and soybeans 9 lower to start the day. The recent rally may not be over, but it is struggling to sustain momentum as planting progress rolls along and we are still in the very early stages of the season.
A national labor strike is planned across Argentina tomorrow which includes the Oilseeds Processors Union in a protest against tax hikes and the privatization of state assets. Another crop report is due out this Friday, which may hold the market at bay until released. The South American crop has been diminished, but so far, the USDA has accounted for almost none of it. Traders are not betting long and may be added a few short here this morning.
In the U.S., the rains for this week have been highly advertised and expectations are that there will not be a lot of planting progress. Next week is still up in the air as there is still disagreement in the models. The CDC is calling for above normal temperatures in both forecasts, with the 6-10 day above normal rainfall the 8-14 dries out.
The Funds are still holding heavy shorts in corn and beans. It’s unusual for them to hold short beans of over 100,000 for very long, a lot of the time they only get that short right ahead of harvest. There have hardly been any price reactions to issues in South American, Europe or India. This recent rally is the best we’ve had in a long time, and massive amounts of cash grain moved yesterday and the day before. Wet weather rallies are usually hard to develop and don’t have a lot of legs.
Rallies need to be rewarded by making both old and new crop sales. These rallies will not have a long tail because the US crop will get in the ground and the South American crop will get harvested. There is a gap in the December corn futures at $5.03 that I have been targeting as our top, but it may take some time to get there if we do. The last .15 cents has been tough to get, so we may or may not get there.
Have a Safe Day!
Garry Gard
920-348-6844
