It was all about Chicago corn and soybean futures last night. Soybeans were crushed, absolutely smashed, losing 118.75c/bu (AUD$57.78) on the nearby contract. Outer months were also sharply lower, Jan 22 down 89.5c/bu (AUD$43.55).
Corn futures were also caught up in what was initially described as a “weather driven massacre”. Chicago Corn was back 40c/bu in the July21, Sept21, Dec21, March22, May22 and July 22 contracts. Seven dollar corn now appearing as a distant memory.
The sell-off initially focused on a better weather outlook (which wasn’t that great) seemed like a huge over kill. Later in the session it became all too apparent that grains were caught up in broader sell off. Stocks, crude, metals, livestock a whole raft of commodities were sold off on the back of speculation about rising inflation and potentially higher US interest rates.
Cash bids for US corn on their domestic market were mixed, some traders not reflecting 100% of the move in futures thus increasing local basis over Chicago significantly while others were having no part of it and took the opportunity to actually reduce cash bids by more than the fall in futures.
The 8% reduction in US soybean futures spilled into other oilseeds. Canola futures at Winnipeg slipped C$30 in all the slots from the nearby to July 22. Even with the AUD back again it will have little chance of countering the negativity in overnight futures. If local merchants decide to track the move in canola dollar for dollar we could see over $30 off new crop bids here today.
Wheat found the sell-off unavoidable and suffered significant futures losses as well. Spring wheat fared the best, cash bids actually rising.