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Another impressive performance in the grain markets yesterday as both corn and wheat held gains through the day, with corn actually closing into new highs for the year. The bean market? Not so much. The Kansas wheat tour is cutting across the state this week, providing reports of yields in the 30 to 50 bpa range as well as the likelihood of greater abandonment than normal. Over in corn, it seems we have moved from concerns about the cold conditions and late planting pace to concerns of the dry conditions that are plaguing a wide swath of the belt. I guess the old adage of “plant in the dust and the bins will bust” has fallen from favor. That could be due to the fact that it seems that it has been years since we have witnessed a dry spring such as this. Note that on the spot weekly continuation chart, we not only pressed into new highs for the calendar year, we also violated the 2017 peak. Yes, we still remain trapped within the broader four-year sideways pattern, but anytime you can move through old levels of resistance, it is noteworthy as it is generally a sign of better things to come. All that said, keep in mind that from a technical perspective, we are getting just a wee bit extended at this time so unless we can keep feeding the bulls with regular positive weather news, we may soon be in line for a corrective break.
With the exception of meal, which is being supported by the multitude of issues in Argentina, the bean complex just can’t seem to find a good story for now. Even in the meal, although we have poked in new highs for the year on the spot chart, which is no small feat, this has just carried us to the targets provided by the measuring gap that was left back in early February, and we already sit in a very overbought position. While that does not assure that we will post a high right here, it is a warning to sit up and pay attention for signs of such, particularly considering that without the meal strength, beans literally, would not have a leg to stand on right now.
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