Corn to wheat, agriculture prices enduring near-perfect storm

Despite another bin-busting U.S. corn-belt production year, trade tensions and the plunging Brazilian real, grain prices are relatively stalwart. For prices to sustain lower, it appears the near-perfect bear-market storm conditions need to endure — that’s unlikely. Led by wheat, the Bloomberg Grains Spot Index is up almost 2% in 2018 to Aug. 28. Broad agriculture is down almost 5% on the back of a 20% slump in the softs and real. Total returns are lower due to steep contangos but indicating improvement. The wheat one-year future curve leads major commodities moving toward backwardation. Even with the best U.S. corn yields ever, prices are down only slightly from a year ago, and the annual average price is higher. Soybeans are the sore spot, but global trade should adjust. The worst appears near for softs with record shorts.Is this as bad as it gets for corn, soybeans and wheat prices?Grain prices may be indicating the worst is over, showing resilience despite another U.S. bumper crop, trade tensions and the plunging Brazilian real. Some adverse weather is supporting wheat, offsetting weak soybeans on trade tensions, yet netting out to a Bloomberg Grain Spot Index up almost 3% in 2018.