Did investors overcook prospects for rain for moisture-deprived hard red winter
It looked that way early on Monday, when Kansas-traded wheat (the parched, hard red winter variety) outperformed a mixed Chicago crop market, showing 0.6% gains to $8.70 ½ a bushel for May delivery.
Sure, there was some rain over the weekend, but according to Meteorlogix a maximum of 0.75 inches on the southern Plains. And this on eastern areas which are not so badly off for moisture.
And prospects don't look much better. The worst drought-affected western parts may receive "a few light showers" on Friday.
The weather service summed up that while there is "an improving rainfall pattern for developing wheat across northern Kansas, north east Colorado, and south west Nebraska… dry conditions and episodes of hot weather continue to stress the crop across southwest Kansas and much of Oklahoma into Texas, with significant crop losses expected".
Kansas wheat outperformed its Chicago, soft red winter wheat peer, which eased 0.25 cents to $7.44 a bushel for May, as of 07:40 GMT (8:40 UK time).
Still, that itself was enough to beat corn, which drifted 1 cent to $7.41 a bushel. So much for the premium that the grain gained, temporarily, over wheat last week.
Wheat in general had an extra supply support on Monday from growing fears for the crop in Europe, the top growers as a region, and where a dearth of rain has also been an issue.
"Dryness persists on northern Europe, and weather services forecast no rainfalls in the coming week," Agritel, the Paris-based consultancy said, adding that the worst effects seemed to be being felt by spring crops, which were "now thought to be at risk, especially spring barley".
Demand issues were making themselves felt on the performance of the two grains too, with Ker Chung Yang at Phillip Futures noting "speculation of hog feeders in the US south east importing Canadian feed wheat as a substitute for corn".
From a pricing perspective, after all, the move makes sense, with protein considerations making the maths work for livestock farmers even with wheat at a notable premium.
"We expect profit-taking activities would continue to take place for the coming few sessions," Mr Ker said.
Where corn is gaining support is from it own new crop weather fears, and the prospect of too much damp for US spring sowings.
"Increasing rainfall and cooler temperatures will delay fieldwork and planting across the Midwest with significant flooding possible through the middle and upper Mississippi Valley," Meteorlogix said.
At Soybean and Corn advisor, Dr Michael Cordonnier said: "At this point, I would characterise the spring weather as troublesome. If wet conditions persist until the end of April, then it would be more serious than just troublesome."
December corn, which closed up $0.28 a bushel on Chicago's July contract last week, made up further ground, adding 0.5% to $6.59 ½ a bushel.
China, the top buyer of the oilseed, raised its reserve requirements on its banks for the fourth time this year in an attempt to make lending more difficult and curb economic growth, so slowing inflation. Lower economic growth should, in theory, quell demand for raw materials too.
And Argentina's farmers made substantial progress on the harvest last week, helped by dry weather, wit 34% harvested, up 13 points, government data late on Friday showed.
Still there is some talk of a frost late last week too, "but no word on any damage of late-planted soybeans", Mike Mawdsley at Market 1 said.