Our markets are finally consolidating a bit and taking a step back from the ridiculous pace they’ve been on; both corn and soybeans were trading double digits lower during the overnight session. There was a lot of emotion wrapped up in this market (which may have overstated values). This is what happens with a market powered by weather (and inflation) fears. It will be volatile both ways; we need to get used to it I’m afraid. Fundamentally, nothing has really changed. Brazil is still dry in the short-term and demand is still strong, affecting both long- and short-term price outlooks.
One slightly bearish factor could be that U.S. planting really kicked it into high gear over the weekend and into this week, which will start to remove any planting concerns (this will be confirmed in next Monday’s planting progress report). Some are also starting to wonder with this big planting window, are we gaining corn acres? Bean acres? Whenever planting does get behind us though, no doubt the bulls in the market will start talking about drought condition in the Western Corn Belt soon. When looking at droughts and how they are traded, the question doesn’t tend to start with, “How dry is it?”, the question will be, “Will the drought persist or is their relief in sight?” Time will tell. I hope you all like looking at weather maps!
Corn is 12 to 16 cents lower
Soybeans are 7 to 14 cents lower