Bye-Bye Weather Premium: Grain and Oilseed Futures Taking a Tumble

December corn
December corn (at end of daytime trade on Monday)

Grain and oilseed futures have dropped sharply over the last week, falling well off the summer highs set earlier in July.

Weather premiums are shrinking as growing conditions have improved, or at least stabilized, across much of Canada and the U.S. corn belt over the last three weeks, explains Dave Reimann, senior market analyst with Cargill, in the interview below.

September Minneapolis spring wheat
September Minneapolis spring wheat

“Even if you stabilize the yield estimates, it’s different than if you’re cutting them every day,” he notes.

Some analysts have attributed the decline in ag futures to the larger sell-off in the global commodity index, as U.S. crude oil prices reached a four-month low on Monday amid concerns about China’s economy.

November canola (
November canola (

“I tend to think this is still a bit more related to weather and growing conditions in the Northern Hemisphere, but there is no doubt the liquidation happening with these concerns about the global economy — you’ve seen pressure in gold and crude oil — that definitely does spill over into ag commodities as well,” says Reimann.

He also shares his thoughts on where the current slide might stop and whether the dryness in Alberta and Saskatchewan has been accounted for in canola and spring wheat futures:

Related: This Week in the Grain Markets — Whose Numbers Need a Reality Check?

Wake up with RealAgriculture

Subscribe to our daily newsletters to keep you up-to-date with our latest coverage every morning.

Wake up with RealAgriculture

Please register to read and comment.


Register for a RealAgriculture account to manage your Shortcut menu instead of the default.