On Tuesday the prices of all cultures in Chicago rose moderately. In Paris crop prices also rose.
EUR / USD index rose to 1.1279. WTI crude oil rose to 48.12 USD / barrel.

Saudi Arabia, Egypt and the United Arab Emirates (UAE) terminated their diplomatic relations with Qatar on Monday arguing that the state supports Islamic rebels and Iran. The measures taken also include blocking the access of ships coming from Qatar or heading to Fujairah, one of the emirates in the UAE. The Fujairah harbor was used by Qatari tankers to replenish oil or liquefied natural gas (LNG). According to a number of analysts, the current dispute can only be traced back to 2014."The measures taken by this anti-Qatar alliance have signaled a determination for a strong change in Qatar policy or the creation of conditions for change of the authority in Doha. Saudi Arabia and its allies will not accept any solution other than a Qatar surrender, "said Eurasia Group. With an oil production of about 620,000 barrels per day, Qatar has one of the lowest productions in OPEC. However, the tension in the cartel may weaken the agreement. Meanwhile US output has risen by more than 10 percent since mid-2016 to 9.34 million barrels a day, close to those of Russia and Saudi Arabia.

Chicago's crop prices rose yesterday thanks to the record high short positions and investors' suspicions that they are reasonably priced. Climate threats for the new crop are on the rise and this is the reason for the doubts. Spring wheat started the rally after the assessment of the condition of the crops was far below the expectations. In a good and excellent condition are 55% of the crops , which is a drop of 7% for the week, presenting  the lowest estimate since 1988 until now. In South Dakota, in this condition are 25% of the crops, which is below the level of 2006, 2002 and 1988 when the worst periods of drought were reported. Wheat crops are affected by drought also in the southern parts of Canada.

It was the opposite for the corn - in good and excellent condition are 68% of the area , which is a 3% growth for the week. This surprised the markets and calmed them for this moment.
Investors who staked on big short positions are terrified of drought in the northern parts of the US and the trend it to move south to the largest corn belt in the country. Time weather simulations continue to show a significant change in the temperature over the next week.

Is it possible to see a quick closing of short positions? Yes, this is perfectly possible given the weather situation and the possibility that it  will continue to be so in the coming weeks. Some analysts report that bad weather has already settled in the Midwest of the United States.
Under these conditions it is hard to claim that the average US corn  yield will exceed the predicted  170.7 bushels / acre.

In the central and eastern parts of Ukrain there is not enough rainfall too and drought affects wheat crops. In some southern parts of Russia temperatures are low and the growth of crops is slow. In the recent days export prices for high quality Russian wheat have risen by 1 USD / tonne, which is unusual for this tine of the season.
Dry conditions for the development of wheat crops are observed in Australia - particularly strong in Western Australia, South Australia, Queensland and the northern parts of New South Wales. The price of wheat in Australia remains high despite the loss of markets and the much lower price of the Black Sea region. Traders are worried about the drought in the country, which also supports prices.

The support for the soybeans was due to the fact that corn sowing in the US is faster than expected, and the transfer of areas to soybeans will be as expected. The forecasts for China's refusal of purchases did not take place, as soybeans in China rose. So US soybeans exports will remain strong and there will be no reduction until the end of the season.
Against all these problems, we must emphasize that the global  demand for wheat remains strong and will obviously be the same in the coming months.

Now it all depends on the precipitation - where, how much and when. We have a real opportunity to turn the market in the new season.

Wheat prices - yesterday wheat futures in Chicago rose by 4.75 - 7.25 cents / bushel. In USDA's June report, global wheat stocks are expected to drop to 255.24 million tonnes in the current year and reach 258.8 million tonnes in 2017-2018. Japan is looking to buy 159,610 tonnes of wheat.

Soybeans prices - yesterday soybeans futures in Chicago rose by 1.5 - 3.75 cents / bushel. Soybeans stocks in the current season are expected to be 90.79 million tonnes in the USDA's June report at 90.14 million tonnes in the May report. In the new season the stocks will drop to 89.44 million tonnes in the May forecast of 88.81 million tonnes.

Corn prices - yesterday corn futures in Chicago rose by 2 - 4.25 cents / bushel. Global corn stocks  in the current season are expected to be 224 million tonnes (223.9), and in the new - 196.5 million tonnes (195.3).
Expectations for the USDA June report are for calming numbers, without sharp changes.