Chicago corn, wheat and soybean futures rallied sharply last night. Corn is said to be the major influence here, it has the best underlying fundamentals but wheat fundamentals, well, will we call it political fundamentals, could not be ignored.
Lower US corn production, good weekly US export sales, drought in Europe, are all helping to drive feed grains higher, especially the heavily speculated US corn futures market. Open interest in the December 2026 corn futures contract at Chicago is a massive 949,661 contracts, 118.7 million tonnes. Volume in last nights session alone was 431,809 contracts, almost 56 million tonnes traded in one session.
This volume and level of speculation has lead some analyst to warn of profit taking, selling, in the near future. The punters are always looking for the next best place to park money.
Wheat was up 45c/bu, that’s a lot, on the back of no new news. Market wires continue to reflect the same stories, Black Sea problems, no end in sight, French drought. Yet we are still to see the massive increase in US wheat export sales that these disruptions are currently being predicted to produce.
Chicago wheat futures gaped higher, closing at a 3 year high. The last time we saw these values was on the way down from the 2022 run up on the back of the Russia / Ukraine war. Here we are again with the Russian / Ukraine war being the main driver.
As with corn, wheat futures at this level do need to find physical support to sustain this rally, i.e., export orders to replace wheat that was expected to ship from the Black Sea, and can not. Failure to see these sales materialise from elsewhere, simply builds stocks and rolls the inevitable fall in values out further. Is this a marketing opportunity, can the wheat futures market go higher, will physical cash wheat values follow futures, not only from the USA but from other major wheat exporters. These are all the questions time will answer. For now, enjoy the rally. We do need to see consumers coming to the plate to replace Russian purchases that a defaulting for this rally to be sustained, and for these numbers to become more than a paper rally.