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| New highs in the grains as the rally continues.
Corn and soybeans trade to their highest levels in 4 months, as beans rally +35 cents.
Wheat makes a new high for 2024, as it rallies +40 cents off todays lows.
So that means anyone who sold corn or beans since January, could have sold higher today than anytime in the past several months. The same goes for anyone who sold wheat this year.
And any of the funds who were selling short since, are now underwater.
While most were preaching for lower levels, we have been saying the opportunities were going to come in spring to early summer for months.
Soybeans are up +90 cents to start the month of May. Now over $1.00 of their April lows.
Corn is up +23 cents to start May, up +46 cents off the February lows.
Wheat is up +50 cents the past 3 days, nearly +$1.00 off their recent April lows.
All grains are now ABOVE the 100-day moving average.
Why are the grains rallying?
The majority is fund short covering. They are still holding historically short positions that haven’t been making them money.
In corn we now have the thought of delayed planting.
Late planting can push these crops into a less favorable growing window. Especially given the fact that we are expected to get a La Nina to drive very hot and very dry conditions in the US this summer.
Overall, national planting isn’t that far behind. The concern the tops states of Iowa, Illinois, and Indiana all seeing some struggle getting the crop in. (Progress map below)
Not only does this push the crop to a less favorable window, but the bigger concern might be the compaction issues a wet spring brings.
Those issues don't go away, the only way to have an outstanding yield after this is if it rains all year long. If we go through a dry spell, there won’t be root structure and it's not going to yield as well.
Did I mention summer is supposed to bring potential record heat and dryness?… (Map below)
We also have extreme dryness in Brazils 2nd corn crop growing area. (Map below)
Keep in mind, late soybean planting pushed this corn crop back into a less favorable window.
Soybeans rallying due to fund covering as Brazils 2nd largest growing state having the worst flooding in 80 years. As half that crop is still in the ground.
Wheat continues to see strength from dryness in southern Russia. This is increasing the export prices in Russia. Which was one of the biggest things holding wheat back the past several months…. (Map below)
Read the rest of todays update where we go over if this is just the start of the rally or if we are nearing the end. Who should and shouldn’t be rewarding this rally and more.
Read Here: https://txt.so/zcmddv
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4 month highs in corn & beans. New 2024 highs in wheat. Rally just starting? - Market comments
