Markets are higher to start the week with March (CH) corn up 4 and January (SF) soybeans up 10.
Today, the wheat market is the one making headlines and leading the charge. Wheat is up big across the board due to a wet forecast for Eastern Australia, the nation’s primary growing region for the commodity. The forecast now shows 1.5-4.5″ of rain in the coming period causing concern that harvest will be delayed and the seed quality will be diminished. This causes concern that the resulting crop will not be able to meet the milling demands of the nation’s Asian trade partners. Both Kansas City and Chicago wheat have posted fresh contract highs and are testing prices last seen in 2012.
The US forecast is little changed from last week. Most of the country remains in a dry, cool pattern. The updated forecast does show a fresh round of heavy rains for southeast Canada, the same region that was hit with heavy rains that caused tragic landslides recently. These new rains could spark more landslides and slow down grain export activity.
Its Thanksgiving week which means a short week for CBOT trade with the exchange closed on Thursday and an early (12pm) close on Friday. Look for thin markets this week with limited volume of trade.
Historically, CBOT have trended higher leading up to the Thanksgiving holiday. With wheat leading the charge, I expect that to be the case again this year. As the week goes on, the trade will be thin out and markets may see an uptick in volatility. I expect much of the week’s action to be done shortly after the open on Wednesday as traders leave the desk to enjoy the holiday break.
Have a Safe Day!