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Weekly Grain Market Recap 6/12-6/16

Jun 16, 2017
Wheat was again the big story in grains this week as growing concerns over the spring wheat crop conditions have those holding short positions in wheat taking notice. Corn and beans saw a turn lower through mid-week, but rebounded after lunch on Thursday and into Friday to finish sideways on the week.

The Minnesota wheat contract has set 2 1/2 year highs this week as traders are seeing the potential for significant losses with wheat in such poor conditions in the Dakotas and surrounding areas. Some in the trade are ready to write off large portions of acres there as various reports of wheat heading out at ankle height or lower have been making the rounds on the internet. Just looking at the headlines in wheat this year explains the reasoning for this rally. With the smallest winter wheat acreage since 1919, and now the potential for a disaster in spring wheat creates enough concern of production shrinking enough that those massive short positions that have been much discussed in the Chicago market are now being aggressively covered. 

Corn continues to trade with all eyes on the sky. Rain chances for the western plain states continue to be limited in the 11-15 day forecasts. The corn belt saw decent precipitation return this week which has helped ease some concerns at least temporarily. Last week's heat and dryness took top soil moisture levels significantly lower, but corn conditions remain fairly strong. Monday's crop condition update will again be watched carefully. 

Soybeans continue to trade with many factors pulling the market up and down. The first fact and perhaps most important is the overwhelmingly large stock of soybeans created by back to back record harvests in the U.S. and South America. The next factor is the upcoming 2017 acreage report that will be put out by the USDA on June 30th. Both of these are telling the market that soybeans should be pricing at lower levels than they are currently. However, this weeks NOPA soybean crush report was 6 billion bushels higher in the month of May than was expected and Chinese imports continue to set records. The wildcard here is obviously the condition of the U.S. crop which will be worth watching in the coming weeks.

-- Disclaimer: The data and comments above are provided for information purposes only and are not intended to be used for specific trading strategies. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Commodity trading involves risks, and you should fully understand those risks before trading.

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