Spring wheat is losing its grip.
That is, its grip on other grain markets, with a soft start to Minneapolis wheat futures not reflected so much in Chicago.
Minneapolis spring wheat for July shed 1.3% to $6.19 ½ a bushel as of 09:15 UK time (03:15 Chicago time), undermined by recent rains which have eased, somewhat, fears over drought damage to the crop in the northern US Plains.
"The market remains overbought. There have been beneficial rains," said Benson Quinn Commodities, forecasting that Minneapolis futures will "drop back to gap [in the chart] left on Monday night".
That would mean a retreat to $6.06 a bushel.
'Production prospects remain high'
But what benefit have the rains actually brought to northern Plains spring wheat crops, some of which have, after all, already been cut for hay by farmers desperate to salvage something, or are too far gone in development for moisture to have much benefit?
This question makes Monday's weekly US Department of Agriculture crop progress report all the more important, in giving a take on recovery in spring wheat after, last time, showing a 10-point fall to 45% rated "good" or "excellent".
Richard Feltes at RJ O'Brien forecast that next Monday's briefing "will show modest gain in US had red spring wheat ratings… given known rains in upper Great Plains."
Furthermore, on the downside for prices, there are some ideas that the Canadian spring wheat crop has not suffered nearly as badly as the US one.
"In Canada, production prospects remain high," said Benson Quinn Commodities, and more may be gleaned on this score later, with a weekly crop progress report from Saskatchewan ag officials.
'Need more rain'
Some selling in spring wheat was thus hardly unexpected, although all is not lost for bulls, and whether the July contract does make it back to $6.06 a bushel in a hurry may depend on weather forecasts.
Tobin Gorey at Commonwealth Bank of Australia said that while "Canada and US spring wheat areas have received some rain to alleviate dryness in some regions… The moisture gains are modest at best and crops will need more rain.
"Weather forecasters do not expect anything close to that amount of rain for the next week or so."
At Futures International, Terry Reilly said that "there is talk of dry conditions returning next week for the northern Great Plains".
'Protein levels low'
Chicago soft red winter wheat, meanwhile, added 0.3% to $4.44 ½ a bushel, although, given it being a time of year when prices are feeling pressure from the US harvest, there was a suspicion that this rise may be down to taking profit on bets on rising wheat protein premium.
Indeed, Kansas City hard red winter wheat, whose protein is greater than that of Chicago wheat, but less than that of spring wheat, put in an in-between performance, shedding 0.1% to $4.57 a bushel for July.
As for the latest on the US winter wheat harvest, by the way, Benson Quinn Commodities said that "most reports indicate average to above average yields.
"Protein levels tend to be low, but may be improving a touch as the harvest expands.
"It is going to have to improve quite a bit to get back to average."
'Very massive changes'
Corn futures, meanwhile, eased 0.1% to $3.77 ½ a bushel, although an earlier attempt by bears to take the contract through the 200-day moving average, just below $3.75 a bushel, failed.
With spring wheat's profile falling, attention returned more to the Midwest weather outlook, which overall is broadly reckoned to be benign for the next few days.
That said, "the forecasts are seeing some very massive changes between runs making it very hard to get a feel if we are going to be wet or dry", CHS Hedging said.
Indeed, WxRisk.com flagged "significant disagreements" between GFS and European weather models on the coverage and amount of rainfall over the next five days in the Midwest.
'Simply going to disagree'
"The GFS model shows 75-80% coverage of 1-3 inch rains across the entire Midwest as far west as eastern Kansas and the Nebraska-Iowa state line," WxRisk.com said, with some areas, such as northern Missouri, central Indiana and north eastern Kansas, to receive 4 inches.
"The European model is substantially different. It has large gaps the rainfall coverage over southern Missouri, Illinois, Indiana, and the rainfall amounts are only between 1-2 inches.
"It is obvious at this point that the models are simply going to disagree and will not come to a consensus.
"For traders and forecasters we will simply have to wait and see Monday" which model proved accurate.
Benson Quinn Commodities said: "I understand why the recent buyer wanted to liquidate some of their position," with the weather outlook broadly OK.
But because of the "wide range in the weather models, there will be points where the trade doesn't want to press this market also".
Given such Midwest weather uncertainty, soybeans showed little change too, shedding 0.2% to $9.30 ¼ a bushel.
Direction later may depend on US export sales data for last week, expected for the oilseed to come in at 250,000-450,000 tonnes for this season, and 100,000-300,000 tonnes for 2017-18.
For corn, export sales are expected at 500,000-700,000 tonnes for old crop, and 100,000-300,000 tonnes also for 2017-18.
For wheat, for which 2017-18 has already started in the US, sales are expected at 350,000-550,000 tonnes.
'Vulnerable to a break down'
Sticking with row crops, cotton made a weaker start, shedding 0.5% to 70.60 cents a pound in New York for December delivery, hitting a five-month low, after in the last session falling through the key technical point of its 200-day moving average.
The contract had not ended below that line for more than a year.
Indeed, the lot is "currently in a short-term down trend and is looking like it may be vulnerable to a break down," said traders at Ecom, flagging the decent US production prospects.
"This is bearish for the New York futures moving into the 2018 crop year."
'Hitting the escape button'
With December futures having "broken through the 72 cents-a-pound US level with ease, the market now will look to find interest around 70 cents a pound US and 68 cents a pound area," the trading house said.
"With the market down [significantly] since the start of the month you would expect any weak long speculators still holding on would be either hitting the escape button or looking to do so soon."
CBA's Tobin Gorey said that "momentum investors might also have begun to sell.
"The market lacks any obvious buyer that, one, will outweigh this and, two, cannot afford to patiently wait for lower prices."