The one thing that always amazes me about US futures markets is their focus on the future.
The ability of the US futures market to brush off a current issue to focus on a synthetic or possible issue is something to behold. This week’s heatwave for instance, it’s just getting to be an issue but the market is already looking at next week’s weather map and selling the market down because the heatwave won’t be an issue then. Fair enough I guess, it is called a futures market after all.
Technically corn was trying to push higher but the last couple of session have seen a distinct downturn equating to a market rapidly approaching over sold.
Wheat futures had nowhere to go and were caught up in the selloff in corn. US wheat values remain well above values needed to compete in the global market so as technically supportive as this market may become fundamentally US values still need to fall further in order to find increased demand. This may happen at various times over the next few months though so depending on production estimates from the Black Sea and Europe there’s a good chance we’ll see trade +/- 10% either side of 500c/bu in the mid-term.
Argentina is seeing some drier weather across Buenos Aires and La Pampa allowing winter cereal sowing to progress. In stark contrast parts of Cordoba and Santa Fe have actually become a little dry. The bulk of the major growing regions are looking in good shape for a big crop though. BA grows close to half the Argentine wheat crop. Argentina is still on track to sow around 6.46mha of wheat in 2019.