With all the talk of the need to source corn and wheat to make up the shortfall from the Former Soviet Union (FSU), export sales in the past few weeks have been surprisingly disappointing.  Buyers, after the initial panic, may be content to wait and see if prices continue to drift lower.  Wheat futures are more than $1.70 off their highs and corn futures are 25 cents off their highs.  

The spread between corn and wheat prices also continues to narrow this week.  When concern regarding the FSU drought first surfaced at the end of June, wheat futures prices were $1.33 higher than corn futures.  Wheat futures rocketed higher, and corn and soybeans sort of followed.  At the peak of the rally, wheat prices were $3.97 higher than corn.  

Wheat futures are definitely off their highs, but to narrow the spread again, corn futures have been the hot star in the past few weeks.  Now wheat prices are only $1.98 over corn.   

This week, “star” status has rotated to soybeans.  As far as exports are concerned, bean sales were larger than expected, as China continues to be the largest buyer.  Plus, all season long, a very common trade was to be long grains (corn, wheat) and short soybeans.  As corn and wheat have backed off from the highs, there has been liquidation of this trade—buying beans and selling corn and/or wheat.  

The risk of loss in trading commodities can be substantial.  You should therefore carefully consider whether such trading is suitable for you in light of your financial situation.