Markets snapped back on Friday night after searching for fair value most of the week. In what is becoming an unprecedented situation in the US the ability for the market to accurately estimate damage and, more importantly, production is arguably futile. Planted area and abandonment becomes only part of the puzzle when considering the impact to national yield. And, disturbingly, this is not just about corn. Wheat and beans are becoming far more opaque given the continued rainfall. After the close on Monday night we will get the latest planting pace estimates. The trade is looking for between 55-65% planted vs the average by this date of 91%. One of the better judges of this in the market has their line in the sand at 60% with anything under this number seen as enough of a catalyst to take the market meaningfully higher. With more rain built into the forecast which gets most of the corn belt past the key prevent plant dates many are suggesting the US could miss planting up to 10m acres. This, with the associated national yield loss would rebase the balance sheet and, subsequently price.

Some amazing changes in the spec positioning according to the CFTC, most notably corn which bought back just under 200k contracts over the week. For context this is just under 50k contracts higher than the previous record in a week that also saw a huge lift in open interest. This is where data crunching can get a little confusing but, as simply as possible, most of this change was the shorts throwing in the towel and getting out. There was evidence also of some decent grower movement over the week as those fortunate enough to have their crop planted took advantage of the spike in prices. Soft Red Winter also readjusted the spec position which is now dangerously close to being long – a position not generally held by the spec.