Weekly Winners & Losers
Corn continues to (albeit slowly) work its way higher with new crop futures touching $4.80 briefly on Thursday:
Dec 24 has even managed to cross back above where Dec 21 futures were trading at this point three years ago, although it remains a far cry from new crop futures levels the past two seasons.
For those in the crowd who are having a difficult time adjusting to sub-$6 or $7 corn - I took Dec 21, 22 and 23 off the chart for you:
And just for the heck of it - here is Dec 25, steadily marching back towards $5:
Chicago wheat had a good week, rallying 26 cents the past five days (+5%) to close at a 3-week high, finding support on a resurgence in Russia/Ukraine tensions and a strong performance in EU markets.
May Matif futures bounced nearly 4% on Friday alone (largest one-day rally since last summer), finishing up 6.3% on the week.
Friday’s move comes as TD Rif (a huge Russian exporter) said ships carrying its wheat exports are being blocked after inspectors found cargo that did not meet standards, according to a Bloomberg report.
A Russian regulator issued a statement in response to the claims, saying the company’s cargoes are “repeatedly failing the safety and quality requirements” while stating more than 80% of the company’s grain shipments have been non-compliant in 2024.
Rumor has it TD Rif was selling wheat below Russia’s strict minimum price floor (and it had little to do with quality). Either way, it lit a fire under Matif futures on Friday.
Full Bloomberg story HERE.
While Chicago’s 6% rally off its early-month lows hasn’t been as strong as Matif wheat’s 10.2% rally from its lows, the movement in Chicago spreads has been substantial.
After May spent the latter part of November into December and January rallying relative to July futures on China’s huge old crop purchases, the spread has given up its gains, settling back into a 15-cent carry on big cancellations.
Although the May-Jul SRW spread never crossed the line into an inverse, here’s a friendly reminder about why the structure of the market can be more important/telling than futures prices themselves:
The inverse (or narrowing of the spread, in this case) is the market’s way of saying, “I want your bushels and I want them now, not later.”
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