The Good: The only good on the commodity board with a small gain across the forward futures contracts. The December contract closed higher today, settling at US$5.21 per bushel. Remember that corn values above US$4.00 per bushel are very profitable. The chart formation is a classic head and shoulder formation with downside now open to the US$4.70 per bushel level which is still 50 cents per bushel below current prices. Weather uncertainty will certainly support the corn market through the next six weeks (the end of pollination), but the chart certainly still looks ugly despite the gains today.
The Bad: The forecasts are pointing to dry conditions to prevail through the first week of June across the northern tier growing areas of western North America. The dryness is centred over the spring wheat and white winter wheat growing areas of the U.S. By the way – this dry forecast doesn’t stop at the 49th parallel. Someone maybe should alert the Chinese buyers of white wheat that they may have to find another supplier this year as the U.S. may be challenged to supply them this year.
The Ugly: There was widespread frost last night across most of the northern and central areas of Saskatchewan and Manitoba this morning with lows mostly in the -1C to -6C range. There still is a frost morning for tonight with the cold temperatures expected across the eastern Prairies. Crop damage will be limited to emerged crops and cereals should be able to withstand the cold temperatures. There undoubtedly will be some damage to susceptible crops from this event.