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| For the 3rd day in a row wheat rallied higher only to collapse well off of its highs failing to hold the gains.
Soybeans found some strength despite all of the bearishness and talk about how we are going to be swimming in beans with this large carryout.
One negative thing in wheat is the Kansas crop tours. That crop is a lot better than it has been in recent years.
Now this actually might be somewhat friendly for wheat. The last couple of years what has happened in the wheat market is we haven’t had any wheat to export.
If we actually have wheat to export, that is going to help out our demand. Demand is not static. The more supply we have, the more demand we can create. Having some HRW to export will help us.
Then add the fact that the Russian wheat crop estimates continue to come in smaller. Expect Russia forecasts to dictate price action in wheat short term. If the rain disappears, we could go higher. If rain comes, we could go lower.
Corn had yet another disappointing day. I think corn will be higher a month from now than we are today. However we could take it on the chin again Monday if crop progress comes in hot 70-75% planted. We have an entire growing season ahead of us.
I don’t think trendline is very probable. We are closer to a 170 yield rather than a 180 in my opinion. So the market should start to add more premium.
One of the biggest bearish factors everyone is looking at is that China doesn’t have any beans or corn on the books. The lowest books they’ve had in years. Smaller than before the trade war.
That is one of the biggest risks to the downside in grains. If something happens and China doesn’t want to come in here and buy. But that’s not new news.
Last year we made our lows May 18th. Which would be tomorrow.
After that, we rallied for a month. Straight up. Then straight down. I could see a similar scenario happening this year.
A couple days ago these markets felt like they are going to go screaming higher. Now today it feels like the sky is falling.
That’s just how these markets are now. This volatility is only going to increase. We are in that time of year where one day it feels like corn is going to go to $6 and the next it’ll feel like it’s going to fall to $3.
You have position yourself to get comfortable with both possibilities…
Listen to todays audio where we go over our thoughts on these markets, how you should be prepared, why we don’t like being oversold but don’t mind overprotecting & more
Listen Here: https://txt.so/VWLLA1
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3rd day in a row wheat collapses off highs. Beans higher despite bearish talk market comments
