The grain trade firmed substantially overnight, fueled by continued rumors that China may soon purchase new-crop US beans and by potentially lower tariffs that will encourage purchases of corn and wheat. Also, France is experiencing a severe heat wave that is expected to reduce crop yields, with temperatures in the 90s to lower 100s and continuing into the weekend. This heat is also affecting Germany and Italy, affecting their crops as well. The wheat and summer row crops are at risk, and Europe has become a consistent buyer of US grains this past spring.

The freefall in prices since the May 15 China Summit and the unwinding of the energy support connection hit bottom early last week, and the prior 10 days were just a grind out of firm base valuations for grains until we get to the June 30 Stocks and Seedings data. November soybeans have proven that 1125-1135 was substantial support. July corn had valuations at last year’s lows, just under 410, with December corn finding the same two-year support under 440. Kansas wheat put a basing value at the 100-day MA in the 615-625 range, while Chicago wheat found its support just under 580. A recovery demand-led rally is now in play, as supply thoughts from recent rains have pushed it's limits for now.

There are areas in the Eastern Corn Belt, including Indiana and Ohio, that have seen way too much rain, with some pockets experiencing flooding, which will need replanting. Given current economic conditions, timing, and this year's environment, abandonment is more likely than replants. And as we look ahead to the next two weeks, excessive rain is expected to fall in the Gulf states, the Delta, and the Midwest. Concerns are growing that the disease will be elevated in the SRW wheat crop, while the yellowing and leaching of expensive fertilizer on row crops will become issues. This is not how you produce a national yield above 183/BPA.