The risk was firmly to the downside at 740 c/bu. Too much hype was built into the market.
When growers have been asking me where price is heading over the last 1-2 months, I've been saying, there's probably AUD$15-20 to come out of the market if it loses interest in Ukraine. Probably another $10-15 if hedge funds reduce their length back closer to neutral. There's $25-40 right there! Turns out that rains across some key cropping areas in the US has meant a fall closer to $40 than $25. Over here in SA, your APW-1 MG contract with fixed spreads has come off between $35-40 across all port zones.
Unfortunately, now that 620 is breached, YC's gap came into play last night on CBOT and next support is ~550 c/bu.
The grain market trades proper balance sheet fundamentals in the longer term but hype in the short term. Just like the share market. I think the current market is evidence of that. Currently sitting between decile 6-7 pricing so all is not lost and there's at least some scope for price increases leading into the Oz harvest. The US crop aint delivered yet!
