Grains ended in the red with funds taking to the sell side on better-than-expected crop ratings on corn, spring wheat and winter wheat.
Plus, Vince Boddicker, Farmers Trading Company, says with corn rated at 75% good to excellent the market sees the crop getting off to a good start, so the mentality has changed to “rain makes grain.”
“You’ve got to believe that’s a lot of it. We had the run up in grains prices and it seemed like when we got to right before the Memorial Day weekend and they couldn’t take out the highs we got some of the month selling and then you have to have something to change that psychology and get the trade to want to buy,” he says.
In the case of soybeans, he says the slow pace of old and new crop exports are also a drag with end users buying hand to mouth. “We have the lowest new crop soybean exports in the last 19 years.” The lower product values have also been bearish for soybean prices.
Wheat futures saw double digit losses with the Russian crop concerns becoming old news and the U.S. winter wheat harvest picking up steam.
“Wheat harvest in Texas and Oklahoma is ahead of normal and early yields are better than expected. Plus, there is already talk ending stocks in the June WASDE pushing above 800 million bushels,” he explains.
Technically, Boddicker says the grain markets are oversold and could see a rebound at any time. “In corn it could be 10 to 20 cents but to get more than that it will take another catalyst,” he adds.
