Headlines:

  • U.S., Canada, Mexico Agriculture Chiefs Meet on NAFTA Renegotiation
    June 20 (Reuters) – Agriculture ministers from the United States, Canada and Mexico expressed a mutual commitment to open and transparent trade after meeting in Savannah, Georgia, on Tuesday to discuss the renegotiation of the North American Free Trade Agreement. It was the first trilateral meeting between U.S. Agriculture Secretary Sonny Perdue (shown at right), Canada’s minister of agriculture, Lawrence MacAulay, and Mexico’s secretary of agriculture, Jose Calzada (on the left), since U.S. President Donald Trump said NAFTA would need to be renegotiated. (Reporting by Karl Plume in Chicago; Editing by Matthew Lewis).
  • Wheat futures renew rally, amid fresh worries over EU, US dryness
    Spring wheat futures soared to a fresh two-year high, with prices strong in other wheat markets too, after US officials surprised investors by again cutting the condition rating on the country’s spring wheat crop, despite much-needed rains. Minneapolis-traded hard red spring wheat futures for July delivery soared to $6.57 a bushel in early deals, the highest for a spot contact since late 2014, before easing back to $6.55 ½ a bushel, a gain of 2.5% on the day. The jump followed a report overnight from the US Department of Agriculture pegging the US spring wheat crop at 41% in “good” or “excellent” condition, a drop of 4 points week on week. That was, by a distance, the lowest reading for the time of year on data going back to 1995, with the next lowest figure one of about 55%, time adjusted, recorded in 1997. The proportion of the crop in “poor” or “very poor” condition rose by 7 points to 27% in the overnight report.

Summary:

Corn and Soybean seemingly fell apart today while Wheat continued to move up hitting multi-month highs. Temperatures have not been as hot as they had been previously easing concern that the Corn and Soybean crops would be at risk. Crop ratings have also ticked up a bit and has lent a hand in pushing Corn and Soybean futures back down. Last week it appears as though Speculative players were running for cover (no pun intended) in a frenzied short covering push. With fears easing, Specs might be inclined to return to repositioning themselves back on the short side of the market.

Wheat prices did rise again but we are 8 buyer’s bars and 13 trading days from the June 1st low. When markets reach these extremes on technical chart, it is not uncommon for a correction to occur when these time horizons line up. It bears noting that both the 8 and the 13 are textbook Fibonacci series numbers. September Crude broke to new lows extending losses after topping on May 25th. From mid Jan 2016 to the 1st week of Jan 2017 Crude moved up nicely on the weekly technical chart. There were two sizable corrections over the course of the year but it recovered from them both. So far this year, it has surrendered about ¾ of the 2016 advance and is very much in jeopardy of giving it all up. It has given up 75% last year’s gains in just ½ the time it took to amass it.