Chicago corn and wheat were smashed again, soybeans left battered and beaten in the corner, it’s a was hard selling session. The funds continue to push commodities lower in fear of recession. Talk about closing the gate after the horse has bolted. It looks like all our fears are coming true, top of the market for input costs to sow this crop and now prices are taking a nosedive. Talk about wealth transfer.
Corn was led lower by the sharply lower oil price, these days corn is linked to oil by the US ethanol market, what hits oil generally rolls into the corn market when production isn’t being affected by drought, which it currently isn’t. Oil was back 8.2% overnight. The US corn weekly crop condition report was out after the close. It showed 64% of the crop is rated Good / Excellent, back 3% on last week. That may help tonight.
US soybeans were smashed out of the park, the Jan23 contract back 78c/bu (AUD$42.55), that’s a big hit. To see Winnipeg canola back “just” C$17.40 was probably a reprieve.
And wheat, all three US grades were sharply lower. I have a bit of “pie in the sky” analysis below if you are bored with the weather this morning. The fund managers are on the recession train and it’s heading south in a hurry. Wheat futures are now below where they were prior to Russia’s invasion of Ukraine. Hard to believe, no, not really, what was hard to believe was the rally to 1220c/bu. fundamental news was a little bearish for wheat too. Canada confirming their biggest sown wheat area in 9 years. Who’d a thought 1100c/bu wheat at sowing would increase acres. With the Canadians sowing 25.4 million acres to wheat and their weather, not great, but better than it was, we will probably see a very competitive PNW wheat market again in 2022-23.  US winter wheat harvest is 54% complete. Spring wheat in the US is 20% in head, well behind last year and the 5-year average of 57%. The crop now rated at 66% G/E, up from last week’s 59%, that will raise a few eyebrows and will probably ensure the fate of wheat in tonight’s session.