Grains resume their weather rally with wheat taking the leadership role on global production concerns, corn and soybeans followed.
Mike Zuzulo, Global Commodity Analytics, says the wheat market is taking its cue from the Paris wheat futures which hit $7.50 to $7.60 a bushel on Monday’s close.
He says, “The European market as we jumped into Monday’s trade realized that there were bigger problems than we had originally assumed the end of last week in both Ukraine and Russia. Some out there are saying 20% to 30% yield losses in some of those key Black Sea provinces that were hit more than one day with freeze damage and the Russian price is showing that as it’s getting upwards of $235 to $240 per ton U.S. dollars in the key exporting regions.”
However, wheat is into chart resistance, and he says July Chicago wheat needs a close above $6.97 before the three-day weekend to keep the rally alive. He says a 2-month high in the Russian Ruble may also get the job done.
Corn followed wheat higher on Monday but may be trading some of its weather concerns. The key will be planting progress as he is hearing of some possible prevent plant in the wettest areas of the Corn Belt.
Soybeans have seen bull spreading and there may be some underlying demand surfacing or the market is putting in some premium due to weather and crop concerns in Southern Brazil. There are also serious infrastructure damage for soy processors and port areas. “If we keep that inversion going into the end of the month, I think soybeans have a chance to continue to follow corn and wheat higher,” he says.
