COMMODITIES 3 minutes to read

Wet US conditions boost corn, wheat prices

Ole Hansen

Head of Commodity Strategy

Summary:  Monday saw the US Department of Agriculture release its latest planting progress figures, with corn planting posting the slowest result since 1980 and soybeans showing the slowest print since 1996. Both commodities rallied in response.


The US grains market has finally found the fundamental support needed to squeeze the record short that had been building over the past few months.
The US Department of Agricultures released its latest weekly planting progress last night and it showed the slowest corn planting progress on record since 1980, while soybeans posted the slowest planting progress since 1996 at 19%. 
The Bloomberg grains index, led by corn and wheat, has rallied by close to 10% during the past seven days and the potential for more short-covering exists after The US National Weather Service said via Bloomberg that more rain is coming to further soak the US crop belt.

Potent storms on Monday in the central and southern plains may bring flash floods and tornadoes, and parts of the northern Midwest are under frost. Heavy precipitation has pushed back corn and soybean planting in the central US, placing wheat quality at risk.

While wheat and corn have rallied strongly, soybeans have been held back by booming inventory levels with nowhere to go due to lack of Chinese demand (ASF and trade war). Adding insult to injury, we now have the potential risk of corn acreage, weather permitting, being switched to later-planted beans. 

CBOT Wheat (source: Saxo Bank)
CBOT Corn (source: Saxo Bank)
CBOT Soybeans (source: Saxo Bank)
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)