Big moves lower in Chicago corn, wheat and soybeans overnight. It’s pretty hard to ignore these kind of moves lower. Yes I know the trade tend to exhibit an ability to ignore moves like this when they go higher but as a rule sharp moves lower like last night, especially on a Friday, might produce some head wind for local markets today.
Apparently The punters took their time to fully digest Wednesday’s USDA report but eventually considered it more bearish than bullish. It had nothing to do with the fact that these futures markets have been over cooked for a couple of weeks now has it. Mind you we still have corn and wheat at +700c / bu on the nearby, historically a great price. A 484 point rebound in the Dow may have also dragged a few punters out of the grains and into the stock market.
The trade ignored the physical corn side of the US market and managed to overlook another 680kt of US new crop corn sold to China.
Sharp losses on the Chicago soybean futures rolled across both rapeseed and canola futures.
Chicago wheat was dragged lower by the row crops and also found little support from small US weekly sales and export numbers.
Better weather in Russia has also seen one private analyst increase wheat production to 81.7mt, I’ve seen another as low at 77.5mt (USDA 85mt). The USDA number out on Wednesday is also attracting some scrutiny after they said 17mha was sown but also said that winter wheat makes up 85% of the 19.3mha of total winter grains sown. That only equates to 16.4mha. Russian based consultants are also questioning the projected 3.8t/ha yield projection. Suggesting 3.5t/ha is more believable. Crimea to produces around 4mt.