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Since last Friday, corn is up 7 cents, soybeans are up 1 1/4 cents, and wheat is up 27 3/4 cents. This is corn and wheat's 3rd week of a higher settle, and soybean's fourth. Soybeans briefly surpassed the 50-day moving average, before moving into the negatives to close. Wheat is now 70 cents off our lows, managing to move out of the 5.40-5.80 trading range we have mostly been stuck in since July.
We have a lot of headline risk on wheat going into the weekend. Ukraine and Russian tensions are high for the first time in months after yesterday's boat attack. There are now talks of Ukraine possibly pursuing retribution against Russia. The Trade is concerned the elevated conflict could be a win for Ukraine but a loss for grain supplies to the export market.
Friday's midday weather model run for Mato Grosso's heaviest crop region showed some modest rain chances beyond 10 days. Not the bone dry forecast from Thursday which put some additional pressure on the soybean market.
Out of all of the commodities, wheat may be the most interesting commodity to watch (or set your GPO's and let the market watch!). Russia and Ukraine are still in drought, while headline risk will keep the market volatile (headline risk is often short lived). After yesterday's USDA report, the corn and soybean production numbers seem to be getting closer to reality. The more weather premium we take out of the market (less risk of adverse weather impacting production), the less market upside potential we see, at least in the short term.
Have a great weekend!
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