CORN 4TH DAY HIGHER & KEY REVERSAL IN WHEAT

Written By Sebastian Frost

MARKET UPDATE

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Overview

Overall solid day to start the new week. Wheat rallied despite the cancellations from China.

Corn posts it's 4th day higher in a row, and highest close in nearly a month.

Soybeans were down a nickel, but remain +50 off the lows from 2 weeks ago.

Export inspections were solid for corn, decent for wheat, and on the light side for soybeans. This was part of the reason for the weakness in beans today.

We had yet another flash sale cancellation of wheat to China. This marks 3 days in a row of cancellations, bringing the total to over 500k metric tons cancelled.

Why did wheat rally despite the cancellations?

The cash market mainly knew about these cancellations last week, meaning these cancellations were mostly old news. A bit of buy the rumor sell the fact.

We had very solid action in the wheat market. Friday we just missed the key reversal on the charts, today we had posted a great key reversal. Boucning +27 cents off the lows.

The CONAB report is out tomorrow. They think the Brazil crop is a lot smaller than the USDA does. Remember last month, our markets jumped when they saw these numbers but the USDA's larger numbers dropped us back down.

Last month CONAB had 114 MMT for their corn vs the USDA's 124 this month. For soybeans CONAB had 149.4 vs the USDA's 155 this month.
 

Today's Main Takeaways

Corn

Corn posts it's 4th green day in a row. We have now traded green the past 9 of 11 days since corn made it's low. Today marked our highest close in nearly a month.

Last week was our highest weekly gain in 5 months.

Corn futures in Brazil jumped today due to the weather. It looks like they will be seeing heat of over 104 degrees this week.

Along with that heat, the forecasts are showing a lack of rain for the next 2 weeks. Not a great look for that second crop corn.

Their second crop corn planting is 93% complete. Ahead of last year's 82% at this same time. I have said this time and time again.. what does a fast planting or fast harvest typically mean? It means it is dry……

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IN TODAYS UPDATE

  • US weather +30 degrees warmer than norm

  • Heat map for July

  • March 28th report

  • Reasons we could struggle in spring

  • Charts look very solid

  • USDA stealing soybeans from years ago

  • Canada warmth and drought

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Sebastian Frost
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CONAB A LOT SMARTER & SMALLER THAN USDA
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USDA RECAP: POOR REPORT, GREAT REACTION