** 6:30 AM CST CBOT Prices: July soybeans are up 1.00 cent at $9.6975, July corn is down 1.0 cents at $3.715 while July Chi wheat is down 5.75 cents at $4.4825.
** AgResource AM Grain & Oilseed Comment: Good Morning! It has been a mixed and slower overnight CBOT trade. Corn, wheat and soybeans have traded both sides of unchanged as traders try to gauge the upcoming Central US weather pattern and the amount of production loss to recent and upcoming cold/wet weather? Mother Nature is not being kind to the Central US farmer in May.
Tuesday’s CBOT open interest fell 12,434 contracts in Chicago wheat, but rose 4,557 contracts in corn and 759 contracts in soybeans. Fund short covering in wheat while fund sales likely occurred in the summer row crops.
The overnight Central US weather forecast is much cooler for the E Midwest with threatening cold for SRW wheat on Sunday/Monday as lows dip into the upper 20’s to lower 30’s as far south as Kentucky and Tennessee. 67% of the IL wheat crop is heading while, 32% of IN and 5% of OH thru last Sunday. The forecast frosty cold temps could catch SRW wheat in its reproductive stage thereby yielding wheat heads sterile. Moreover, wheat does not like wet feet and standing water will be widespread which will increase disease pressure.
US wheat futures are correcting based on reports from E Kansas of average yielding crop potential in the Crop Quality Tour, but it’s the western half of state where the cold weather damage will be noted. ARC doubts that wheat has scored its seasonal high, and any further CBOT correction should be modest. The big overnight news is all of the flooding that is occurring across MO, IL and IN this AM! Road closures, fields underwater and rivers reaching record crests are causing a massive mess with more heavy rain is slated to drop today. Its already raining heavily this AM across E KS and S MO with 1-4.00” of new rain expected into the southern half of IL and IN to exacerbate the already critical situation. Crop replant will be widespread at some point with producers already asking about the US Prevent Plant Program and considering throwing in the towel in 2017 production.
Much needed dry/warm weather will occur across the Plains and extend northward into the Canadian Prairies this weekend. Highs across the S Plains will reach into the 80’s to lower 90’s. Spring planting will be scoring solid progress in the W Midwest and N Plains this weekend and early next week. However, the GFS model has a new storm system offered in the 8-11 day period for the Midwest, which unfortunately, will keep wet areas too wet for seeding.
In world ag markets, China’s Dalian meal futures held steady overnight with the most active Sept contract closing at $414.50/MT while September DCE corn fell $.01 to close at $6.05. July Malaysian palmoil futures lost 26 ringgits to settle at $2,521 RM/MT, while Paris wheat is down $.50 euros/MT at $169.00.
Cold/wet weather markets are hard to trade. 1993 was a cool/wet spring with widespread flooding with crop losses not evident until late June. ARC would caution against selling CBOT breaks with additional cold/wet weather forecast.
