Last week old crop gave up a large chunk of the recent rally, negotiations have started around the Black Sea Corridor and its possible extension beyond March, but for once this wasn’t the main story. US economic data for Jan published last week was disappointing, which increases the likelihood of higher interest rates persisting for longer, that strengthens the Dollar and that in turn makes US wheat/corn exports more expensive for the Countries who might want to buy them. So speculative trade is now all about short selling wheat and increasingly now corn in the hope of profiting from any weakness to follow. One might think that’s a dangerous game to play ahead of the next phase in the Ukraine war – we shall see soon enough ?

The downside appears to have enough momentum in it to test the lows of early Jan but old crop wheat is now trading at a discount to pretty much everything else, including corn, even new crop wheat , so this limits the downside room and we may just have a choppy directionless week ahead. Consumers are still active in old crop which is encouraging both for prompt movement prospects and also for deals staying on the table into the summer months. This weeks forecast has dried up a fair bit, another weeks spring drilling could push us over 60% done heading into March, a good start particularly if it warms up later in the month. There are no issues anywhere in Europe reported for the spring crops as yet, now we wait for crop emergence which is typically a sensible moment to dip a cautious toe in the water.

Have a good week.