As has been the case over the last few weeks – the market was a tale of two halves. Wheat, corn and beans were all solidly higher in the night session reacting to the planting pace report which came in slightly below the average trade guess.

The on-going debate around the impact of the excessive moisture in the US has got more complex with the southern half of the Hard Red Winter belt getting inundated with thunderstorms. Parts of northern Oklahoma and southern Kansas have received over 10 inches in the last 2 weeks which puts not only abandonment in question but will certainly have a quality impact. Meanwhile, any problems in Russia have seemingly been avoided with independent analysts calling their wheat crop greater than 80 million tonnes. This clearly shows the disparity in the market and further divides values from the US and the other major exporters.

Soybeans broke their recent trend and traded lower overnight despite the issues with planting pace. Many in the market are willing to back a bail-out by the Trump administration in the form of a payment or subsidy to soften the blow from the trade war. This makes the prevent-plant calculations near impossible given the random nature of any possible make-whole from the Govt. Some suggest this payment would be calculated from last year’s production whereas others are convinced this would be based on this seasons planted area. This will drive growers incentives to either take corn prevent-plant, try and plant corn given the board rally or sit back and try and plant soybeans. Anecdotal reports that the grower is better off taking prevent-plant is a little misleading given absolute returns are very localised – what may be true in one part of the belt may not work in areas with higher rent costs and lower basis.