It was a solid recovery week for the grain markets, even though profit-taking showed up on Friday.
At one point this week:
Wheat rallied roughly 40 cents from Sunday night’s lows.
Corn recovered nearly 15 cents from its weekly lows.
Soybeans were more than 20 cents higher at one point before trimming gains.
While Friday’s session erased part of those advances, the important takeaway is that the relentless selling pressure finally stopped. The “falling knife” that dominated the grain markets through May appears to have found a floor.
🌾 Wheat Market Supported by Global Production Concerns
The wheat market continues to find support from growing production issues around the world.
Soft Red Winter Wheat Concerns
Heavy rains continue across:
Missouri
Indiana
Ohio
creating favorable conditions for scab development and raising concerns about yield and quality losses.
European Weather Problems
Heat is becoming a major concern across Europe:
France is expected to see temperatures in the 90s and low 100s.
Germany and Poland remain in critical flowering stages.
Ukraine remains dry, although temperatures have been moderate enough to prevent major stress so far.
Super El Niño Adds Longer-Term Risk
Weather agencies around the world, including:
Japan
Australia
NOAA
have now confirmed a developing Super El Niño.
Historically, Super El Niño events have often reduced Australian wheat production, particularly during August and September. While nothing is guaranteed, historical precedent suggests lower production risks are increasing.
The result is a global wheat supply outlook that is becoming progressively tighter.
