The Weekender

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Just a few weeks after markets were focused on tightening global supplies, Chinese demand, and the possibility of weather problems, we spent this past week stripping out risk premium. Favorable weather across much of the Corn Belt, improving moisture in key growing areas, and the continued absence of Chinese buying sparked one of the most aggressive bouts of liquidation we've seen in quite some time.

When someone yells fire, the exit is never large enough. Funds headed for the door all at once, pushing corn to new contract lows, triggering a record week of liquidation in wheat, and dragging soybeans back toward $11.

The focus has shifted from tightening supplies and soaring inputs to favorable weather, a record South American crop, and a market no longer willing to pay up for risk as Middle East conflict appears to be navigating toward a resolution.

The exception was the biofuels story. D4 RINs pushed to fresh highs, crush margins remained near record territory, and soybean oil continued to outperform the rest of the ag complex despite a late-week setback.

The market giveth and the market taketh away.