Wheat and soybean futures at Chicago were down sharply overnight. Corn faired a little better with minimal losses. The selling in the Dec21 wheat contract has continued into the overnight session there.
Looking at the charts wheat for the Dec slot is now very much over sold. A stark contrast to just a week or so back. The volatility of the spring thaw period in the northern hemisphere is subsiding a little so as much as we should be looking towards a technical correction from this week’s heavy selling in wheat, it may take a significant change to the S&D sheets to encourage another sustainable rally.
Someone who likes to draw lines on charts might also tell you Chicago Dec21 wheat has more chance of hitting 670c/bu than it has of climbing back to 740c/bu in the short term.
The weather map is finally starting to look a bit better for the US spring wheat belt and the Canadian Prairies. Parts of SW Saskatchewan and SE Alberta and central Montana could see 75 – 100mm of rain over the next 7 days. If the forecast is correct it will continue to put pressure on spring wheat values there. Good falls along the Mississippi Valley and western Kansas are also considered beneficial.
Central Russia could do with a few more falls and central France may see 5 – 15mm in the week ahead. Add this to the 25-30mm that fell across much of France last week and it is going a long way to fixing any dryness that was evident in NW France early May.
Another major influence is the reduction of managed money in grain futures. Both European and US grain futures have seen the funds taking profits and heading for greener fields over the last week or so. Keep an eye on the Russia / Kazak spring wheat crop, it’s getting drier.