Grains end lower again on Tuesday seeing more fund selling pressure on the lack of news and the lack of a weather threat.
Allison Thompson with The Money Farm says the markets have drifted with the lack of news and lack of weather threat in the typical “Doldrums of Summer”.
The change in the weather forecast which put rain into the prime areas of the Corn Belt started the selloff on Friday and its been a downhill slide since then, especially for soybeans.
Crop ratings are also historically high for this time of year she adds and record yields are still on the table.
Technically corn and soybeans had inside days.
However, Thompson warns the selloff in grains could get even uglier if November soybeans take out $10 and December corn takes out $4.
The funds are short and in control and she says they could continue to add to those positions without a reason to change course.
She doesn’t think that will happen until after the WASDE as the market is trading higher yields and will need confirmation of that from USDA.
Soft and Hard Red Winter wheats made contract lows and Minneapolis came within a cent but Thompson expects more pressure in wheat as spring wheat harvest is starting to roll and until the U.S. gets competitive enough to spur export demand.
She is keeping an eye on global wheat production issues in the Black Sea and Canada.
