Headlines:

  • EU rapeseed prices rise as cold, dry weather threatens
    Rapeseed prices in Paris rallied, as cold, dry weather prompted downgrades to production prospects. “Operators are still displaying concerns regarding the European production in a context of low temperatures,” said Agritel, another French consultancy. August rapeseed futures in Paris were up 0.8% in afternoon deals, at E370.75 a bushel, headed for the highest close in over a month.
  • Hedge funds lift bearish ag bets near to record – spurring weather rally talk
    Hedge funds extended bearish bets on ags to the second highest on record, including their biggest ever net short in wheat and a larger-than-expected net short in corn – raising the potential for weather setbacks to spur price surges. Managed money, a proxy for speculators, lifted its net short position in futures and options in the top 13 US-traded agricultural commodities, from corn to hogs, by 68,232 contracts in the week to last Tuesday, analysis of data from the Commodity Futures Trading Commission regulator shows. The increase took the net short – the extent to which short holdings, which profit when values fall, exceed long bets, which benefit when prices gain – to 231,206 lots, a reading beaten only once in data going back to 2006. It also represented a 10th successive week in which hedge fund sales in ags exceeded purchases, the second longest such spree on record, behind only an 11-week run which ended in early 2014

Summary:

After excessive rains across the Corn Belt over the weekend, one more system is expected to move across the Corn Belt today and tomorrow. That news sent Corn rallying today with it testing previous highs that were made early and mid-April. Additionally, heavy snow that hit western Kansas and in Colby (the number 1 Winter Wheat region of the US) may have caused massive losses to the western Kansas Wheat crop. The futures markets responded quickly to the bad news with Wheat contracts rally 20+ cents across all series. The Winter Wheat crop was developing faster than normal because of mild winter making it particularly vulnerable to snowfall.

Corn and Soybean crop plantings were also delayed because of heavy rain in the Midwest. July Corn was up 10.25 cents and July Beans were up 13.50 cents. The US Dollar was basically flat today but it remains close to the low end of it trading range from the last 7-10 trading days. The southern region of Brazil got freezing temperatures of its own cause some setbacks in the Safrinha Corn crop. All of this new made for a very strong rise in the grain and oil seed markets today.