Corn, wheat and soybeans were all lower at Chicago. Corn was hardest hit with the nearby contract shedding 12c/bu (AUD$6.85/t). Volume in the corn pit for the session indicating a number of stop loss orders were probably triggered. The move does point the contract into more neutral ground on the stochastic but with the prospect of bigger acres and ideal planting moisture available in the spring corn may struggle somewhat without unexpected demand.
Argentina confirmed they expect to see a corn crop around 49mt this summer. The recent rainfall seems to have helped everyone to forget about the export tax increase decimating summer crop production and corn acres increased a little. If you were to overlay the major corn area in Argentina with the rainfall map of the last 14 days there wouldn’t be much difference. The rainfall has been all but perfect for corn.

The sharp move lower in corn futures didn’t help HRW in the US. With the lower grade HRW crop has been discounted substantially to compete with corn into the feed ration. So you see HRW had nowhere to go but to follow corn lower. Wheat at Chicago was also technically due for a correction. If you were to trade off the charts you may well think wheat has a day or three of down left in it yet. Unless we see some good numbers. Last week’s export sales out of the states were announced last night. Corn saw sales of 544kt, nowhere near enough to counter the technical selling. Wheat did see some good US sales put on, 710kt isn’t a small number and it did beat the biggest of the trade estimates prior to the report but it wasn’t good enough to see a break in the profit taking created in the corn pit.