After early morning weakness tied to some profit-taking following Monday’s limit-up move, all three wheat markets recovered in very wide-range trade, with both hard wheat markets scoring new highs. Corn and soybeans were mixed in two-sided trade, with corn down and July beans finishing sharply higher.
Wheat futures, in wild and wide-ranging trade, finished sharply higher again following Monday’s limit-up close. The bullish factors for wheat are still in force, starting with the Indian government’s ban on exporting wheat. Today it was announced that a 500,000 metric ton (mt) sale of wheat to Egypt will be allowed to ship before the ban begins. There are varying reports regarding roughly 1.8 million metric tons (mmt) of wheat stuck in port, with some saying the wheat will be unloaded and moved back into the domestic market. Nobody knows for sure, but India will apparently not be the kind of wheat exporter that WASDE and private analysts thought. Weather is still a bullish factor in many places, including the U.S. where hard red winter wheat is again deteriorating as hot and dry weather has sapped soil moisture and yield potential. Monday’s Crop Progress report showed winter wheat declining two points to just 27% good to excellent, the lowest rating since 1989. Forty-one percent of the crop is rated as poor to very poor. Kansas is 24% good to excellent and 41% poor to very poor, while Texas wheat condition is dismal, at just 5% good to excellent and a huge 81% poor to very poor. Spring wheat planting advanced last week, but at 39% planted is still under the average. North Dakota and Minnesota have real problems, with North Dakota at just 17% planted, while Minnesota is only 5% done. The areas of real concern appear to be northern South Dakota, all of North Dakota, and northern Minnesota, with each at risk of a further planting delay and a switch to other crops or prevented planting. Other weather issues are growing dryness and heat in the EU along with China wheat enduring dryness. Wheat doesn’t show any real signs of slowing down the ascent, but it is getting very overbought and is volatile, so at some point we can expect a nice correction. DTN’s National HRW Index closed at $12.98 — 54 cents below the July contract.
Corn futures finished weaker in quiet trade Tuesday, with new-crop December backing off from the new contract high reached Monday. There was not a whole lot of news to drive markets, other than Monday’s Crop Progress report. That report showed just how quickly producers can plant corn, with an increase of 27 points in acres planted to 49%. That was about what the trade expected, but it remains well behind the five-year average of 67%. Fourteen percent of the corn crop has emerged, less than half of normal at this time. Key states Iowa and Illinois are 57% and 55% planted, while Minnesota and North Dakota are the laggards. Minnesota, at 35% planted, is less than half the average pace, while North Dakota is just 4% done compared to a 41% average. That will almost surely mean pollination in those late-planted crops could occur during some of the hottest times in July. Weather on Tuesday is clear in many areas, but some scattered storms are moving across parts of Kansas, Nebraska, the Dakotas and into southern Minnesota. More rain is slated to hit North Dakota, Minnesota and Manitoba starting Thursday. The Brazilian corn basis has been moving steadily higher, so U.S. corn remains a discount, and the export outlook is promising. China’s internal corn price is $11.32 per bushel on Dalian’s September futures. In Brazil, the primary safrinha corn area remains too hot and dry in central Brazil, and in the south, there are frost warnings for Thursday-Friday. The wheat premium to corn is now huge, pretty much ensuring that wheat will not be a feed grain this year. DTN’s National Corn Index closed at $8.01 — 9 cents under the July contract.