In the overnight session the grains traded sharply higher with corn up 10 1/2 cents, soybeans up 19 1/2 cents and wheat up 26 3/4 cents this morning. Wheat has broken through resistance which hovered around $5.36 3/4 and is building momentum to the upside, soybeans has been above its 100 day moving average since Monday and is now trading above 10 dollars. Next resistance level for July soybeans is around $10.42 3/4 which was a previous high back on February 26th. Corn is trading around $3.86 1/2 this morning which is just above its downtrend resistance of $3.81 and the 100 day moving average of $3.79. Keep a close watch on today’s trade action as we could see prices chop around throughout the trade day.
This morning’s rally is triggered by the strong amount of rain that went through the Midwest on Wednesday and the rain forecast throughout Thursday and Friday. On Wednesday evening a storm blew through Iowa and Missouri dropping as much as 7 inches of rain in some areas. Traders are concerned that the excessive rains will damage yield prospects for this growing season. Thursday will usher in a another storm into the Midwest bringing 1 to 3 inches of rain to South Dakota and then Missouri, Illinois, Indiana and Ohio on into Saturday.
In other parts of the world dry weather is beginning to be a concern. The conditions of French wheat declined this week according to the FranceAgriMer who cited dry weather as the main reason. As of June 22nd the good to excellent ratings fell to 81 percent compared to 85 percent a week earlier and 87 percent on June 8th. Weather in France is expected to remain hot and dry with temperatures forecast to hit record highs next week in many parts of the country.
