CBOT Closing Comments


July soybeans closed at $11.87, up 1 ½ cents, after earlier hitting an eight month high of $12.00 ¾. November soybeans closed at $10.50, up 7 ½ cents. Whilst that still makes $1.37 inverse premium between old and new crop, that differential is far from unjustified. I find it slightly strange that new crop has been gaining on old crop the last few sessions. Whilst US plantings are behind schedule, they are not critically so when you look at last year, and the final yield we managed to end up with. This week's export sales data from the USDA will be interesting to see if China are still around. I'll stay bullish old crop and bearish new crop.


July CBOT wheat settled at $6.25 ¾, up 13 ¾ cents. July MGEX spring wheat settled at $7.79 ¾, up 25 cents. Winter wheat conditions were lowered by the USDA last night, when a modest increase had been expected. Spring wheat plantings caught up a bit but are still lagging normal pace. May 31st is widely accepted as the deadline for planting spring wheat, anything planted after that date will likely see sharply reduced yields and leave farmers unable to claim full crop insurance compensation if anything goes wrong. The bottom line here, surely, has to be why even bother taking the chance with soybeans at $12/bushel? Very early yields on winter wheat out of Oklahoma are said to be shocking. I'm strongly bullish new crop.


July corn finished at $4.26, down 1 ½ cents. Plantings caught up a lot last week, according to the USDA, but forecasts are turning wet again for the week ahead, particularly in Illinois and Indiana which are two of the states furthest behind. Many areas will see farmers penalised on any potential crop insurance claims if they don't get their corn into the ground in the next fortnight. Whilst that might pose a few problems most years, with new crop beans at $10+ it doesn't seem like it would take too much calculating to abandon a few more corn acres & switch them into beans. I'd be mildly friendly to corn.