Grain markets are staging a corrective rally today, a welcome sight after the recent beating. While a technical analyst might point to oversold conditions triggering a corrective rally, there are also several fundamental themes impacting grain markets today.

Port closures in South America have dried up export offers for soybeans and soymeal, making Chinese purchases of US supplies more likely. Soybean meal is leading the charge higher today in the soybeans.

Wheat futures are following through dramatically on yesterday’s strength with KC and Chicago futures both trading up 20 cents/bu in early trade, currently trading up 15 cents/bu higher at time of writing. The market is finally pricing in the unprecedented consumer demand for flour and packaged foods due to stocking behavior; supply chains are ramping up to replace inventory on grocery store shelves. Minneapolis spring wheat is up today but has been struggling relative to Chicago and KC due to the collapse in the value of the Canadian dollar, which has rallied spring wheat prices to the Canadian farmer. Even though May’20 spring wheat futures closed unchanged yesterday at the Minneapolis Grain Exchange, the futures price in Canadian dollar terms was up more than 20 CAD cents/bu!

Corn has been under heavy pressure due to the collapse in energy prices and the subsequent weakness in cash market bids from the ethanol sector but energy prices are staging a recovery rally today and corn is following suit. Additionally, there are rumors of potential export activity for US corn in the PNW.