Corn and wheat futures at Chicago have been overbought for some time now but last night’s “correction” ahead of the USDA report may go some way to seeing a decline in the massive speculative longs built up over the last couple of weeks ………. may.
The trade didn’t need much of a push to get the selling underway. The first push was supplied by the USDA weekly crop progress report. Weekly planting progress in corn was rapid with the USDA now estimating 67% of the corn crop is now in the ground. The 5 year average is 52%. The pace of planting of US spring wheat was also good with 70% of the crop now sown versus the 5 year average for this date of just 51%. Spring wheat emergence is also good with 29% out and growing.
The winter wheat condition rating improved 1%, now pegged at 49% good to excellent.
Looking at the weather forecast for the US we see good rain expected across the corn belt over the next 7 days, heaviest across Illinois and Iowa the two biggest corn states. The spring wheat belt in the US and Saskatchewan appear to miss much of the rain though.
Soybean futures at Chicago faired a lot better than wheat and corn but the relatively small decline in soybeans did not translate to small losses in canola and rapeseed futures which were both sharply lower. With local old crop canola basis at -$311 and new crop at -$11 both have ample ability to absorb this decline in oilseed futures, will they, let’s see, I know where my money is.
With local sorghum values having more to do with logistics and nervousness over current execution and payments I can’t see sorghum hanging onto yesterday’s gain, I can’t see it falling out of bed like corn and wheat futures did but pressure will be applied.