Corn: Corn has been strong to start this week, mainly due to larger than expected declines in crop conditions. Monday’s report showed Corn G/E rating dropping to 64% vs. 67% expected and 69% last week. The sharp drop in open interest during yesterdays rally is a good indicator that this rally was mainly fueled by short covering. There are some rains coming by the end of this week, but the question is now, “is it too little too late” for the corn crop. As usual, I expect the gap from Monday nights re-open to eventually be filled, but it will take lack of demand or much improved conditions/ratings to see an extended move lower.
Soybeans: Soybeans, like corn, saw a drastic drop in G/E ratings on Mondays report. The ratings dropped down to 69% from last week’s 72% and vs. expected 70%. For the time being, China demand remains strong, the charts seem strong as well as the rains coming this weekend not being enough, or timely enough either. Grains as a whole seem strong right now, and I would expect soybeans to test $9.40-$9.50 before seeing some selling pressure into harvest.
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