In need of an energy drink
While we have yet to do anything bad per se, the combination corn, wheat, bean advance appears to have run low on fuel once again. After the initial spurt in Monday morning, which itself failed to quite reach back to last week’s highs, it would appear that we are in search of something fresh to keep up the energy levels. I do not mean to pitch a product, but it looks as if these bulls are in need of a Red Bull. As I have commented many times in the past, bull markets need to be provided with fresh feed on a regular basis to continue to grow and can become quite surly when it does not arrive. Granted, with the uncertainty of summer weather looming ahead, it is difficult to think there will not be additional excitement ahead. Still, it is difficult to say for sure just how much premium has already been factored into prices in anticipation.
While April shower may bring May flowers, thankfully, they did not bring the development of April planted corn along too quickly as there were freezing temperatures up in Northwestern Iowa and the surrounding area overnight. While anything out of the ground may have been tinged, the overall impact should be low. The forecast that I have seen this morning call for rains to move into the northwestern plains and Canadian Prairies later this week and into the upper Midwest next week. All would, of course, be very welcome. The lower Midwest and Delta are forecast to remain wet.
We have a little good news/bad news scenario in export trade this morning. The good news is that Mexico has stepped in to purchase 184,100 MT of corn for the 2021/22 crop year, and unknown destinations have bought 147,320 MT. Of that total, 45,720 MT is for the current crop year and 101,600 for the next. The bad news is that China has canceled 140,000 MT of corn for the current crop year. Weekly sales will be out tomorrow morning.
Not much excitement in the macros this morning. Energies and metals are firm, financial instruments are lower, equities were mostly higher after a washout yesterday, and the dollar is stable. Concerning that final market, while it would be premature to say that the recent slide is finished, the index did close higher last week and has attempted to build on that strength again this week. I would point out, though, that we sit in a very oversold position on the monthly chart, and while indicators have yet to cross higher, they would suggest that the next swing of any magnitude should be to the upside. If correct, that could provide stiff headwinds for any rallies later this summer/fall.