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Market Thoughts 4.30.23

So what happens now? Recent market behavior fits fairly well with the longer term bearish outlook we’ve maintained for months. Expectations we made a while ago for harvest 2023 to feature 4.50ish corn and 7.50ish wheat don’t seem so far-fetched now. Unfortunately though, we’ve also been pretty certain that a short-term rally was in store, and that idea hasn’t fared particularly well. How likely is it then that selling eases for now and grains mount a rally of some degree? A few things that offer some insight:

  • All four new crop price signal charts were Strong Buy as of Friday. The last time this happened was July 21st, which coincided with the summer lows for grains and a substantial subsequent rally.

  • We still think it’s most probable the Ukraine export deal goes away after May 18th and that the market isn’t pricing in today the risk of that occurring.

  • We’ve been illustrating the seasonal comparison to 2013 for a long time but it’s also worth noting the spring/summer seasonal in any year. First, there has only been one year this century that corn made a calendar year high prior to April. Unfortunately, that year was 2013…Nonetheless, there is an overwhelmingly strong seasonal tendency for grains to rally after April. Second, even 2013 featured a 60-cent rally from lows made on 4/24 and 5/21. In other words..

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