On Thursday we saw some interesting numbers that in many ways confirmed the recent trends in the grain markets.
Historically we get a rally in soybeans and some weakness in corn this time of year. However soybeans are fundamentally weak right now on the back of large supply both in the US and internationally.
While the WASDE report came in line with expectations for soybeans, export sales actually copped a larger than expected cancellation.
Corn on the other hand was a little weaker and sold off a touch.
The question we have to ask now is how much of this has been priced in?
I’m looking at a May 15 ZS-ZC spread and waiting for signs of life before entering.
I really don’t like fading fundamentals so I’ll be very cautious before taking a bullish position here. This spread is going to have to show some signs of support – maybe this trend line. At the moment there isn’t really too much.