Corn and soybeans led the rally, with concerns that the yields, particularly soybeans, with be hurt.
This was also reflected in the USDA crop conditions with both being revised lower late Monday.
In regards to both corn and soy, looking at the spreads they are hugely over extended, in terms of what we have historically seen. However it's just too dangerous (in my opinion) to be trying to pick a top given the buying that continues to come in.
I might be inclined to look at spread in wheat, which has been flying under the radar a little, given the large worldwide supply.
Wheat is following the lead of corn and soybeans, but still has a lot of competition from other worldwide producers. This in effect is helping us get a better price with hopefully some good potential and (somewhat) limited downside.
Natural gas has also been trending higher on the back of above average temperatures across much of the US. Prices didn't really break out higher on Monday, even given the extra heat, which makes me think there's a fair bit priced in already and people are ready and waiting for a change.
As I spoke about last week there is the potential to look for a nice move lower when we begin to enter the shoulder season. It's also fair to say that given the late start to the ramp up in temperatures, injections aren't likely to be as high as one might expect in the peak of summer.
I'm continuing to watch the weather closely for a potential late season sell-off on any change in outlook.
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