Headlines:

  • USDA Acreage and June 1 stocks report tomorrow, 12:00am EST
  • Spring wheat futures jump 7%, as Canadian sowings fall short
    Spring wheat futures soared 7% after Canada heightened supply concerns by downgrading its sowings estimate for the grain- with canola unexpectedly becoming the country’s most popular crop. Minneapolis-traded spring wheat for September soared 7.3% at one point to touch a three-year high for a nearest-but-one contract of $7.59 ¾ a bushel. The contract eased back in late deals to stand at $7.43 ¼ a bushel, up 5.0% on the day. While futures had opened firm, amid continued downgrades to the drought-hit US crop, the rally gained legs after Statistics Canada reported that Canada’s spring wheat sowings had hit 15.8m acres this year. While up 2.5% year on year, that figure was nearly 900,000 acres below the sowings level estimated in March, after a survey of farmers of their planting intentions. Traders had expected the figure to come in well above 16.0m acres.
  • Monsanto raises doubts over ideas of Brazilian corn sowings rise
    Monsanto raised doubts over forecasts of Brazilian corn sowings to set a fresh record next season, flagging the dent to planting prospects from weak values – which in Mato Grosso may soon fall below transport costs to port. Some commentators see Brazilian corn seedings in 2017-18 maintaining their long-term growth trend, with the US Department of Agriculture forecasting area of a record 17.7m hectares, up 200,000 hectares year on year. However, Monsanto chief operating officer Brett Begemann noted the dent to the appeal to farmers of corn from prices which were “depressed compared to last year”, meaning that the seed giant was expecting farmers to “cut the acreage back a bit. While the fall was “too early to call” in detailed terms, “we do anticipate it will be down some. “We’re planning for somewhat of a reduction in acres,” Mr. Begemann said, with Monsanto taking the corn price weakness “into consideration as we look at pricing our genetics”, and not expecting a repeat of the strong price rises enjoyed in 2016-17.

Summary:

The Wheat market once again lead not only in overnight strength but over the course of the trading day as well pulling Corn and Soybean futures higher as well. The StatCanada Report that was released today showed a drop in Canadian Wheat acres along with weather forecasts that showed very little if any rainfall for the northern Plains sent the bears running and the set the bulls firmly in control of the Wheat market today. Spring Wheat that was recently planted is now seemingly at risk because of little rainfall over the past month. Data shows that about 2/3s of the region has been subject to drought conditions while the remain 1/3 is unusually dry. Only 40% of the Spring Wheat crop in the US is rated in the good to excellent category which far behind last year pace at this time of 72%.

Chicago Wheat bounced right off of our key make or break support level today at 451 ¼ and made a surprise rally all the way up to 483 ¾ intraday. We had previously projected a price objective of 500 for this contract but was beginning to believe that time was running for a run to that target given that 1st notice is tomorrow for the July contracts.