COMMENTARY 6/18/18

Widespread coverage of rain spread out over the next two weeks (forecasted), then a chance for some cooler air is thought to move in.   The biggest accums are thought to range 1.75” to 3.50”.  Wonder when some of that is going to come our way?  With wheat harvest ramping up condition-wise, we MAY be better off waiting for rain until AFTER we have get the wheat cut.  This dryness IS giving corn plants the incentive to send roots downward….but this humid 90 deg temps are beginning to cause some stress.

CORN

UP 1

Mixed trade as trade weighs forecasts/dry areas, and HEAT. This local COULD use an inch or two.  Though forecasted, rains moving across IA and IL has been disappointing.  On Mon afternoon, the market is expecting crop ratings to be mainly steady to one lower from 78% G/E last week and compares to  67% last year and 71% avg.  China’s drier areas continue to be dry while France is 98% planted, but their G/E rating has dropped 7 to 77% due to heavy rain.  Tues’s USDA Wasde is just around the corner on 6/12!  The Trade is expecting to see 17/18 c/o 18 mill bu lower at 2.164 in a range of 2.125-2.208.  The 18/19 c/o is thought to be 30 mill bu lower at 1.652 in a range of 1.425-1.851.  The SA crop est look for Argentina down ½ MMT to 32.5 in a range  of 31.0-33.0. Brazil 2.9 MMT lower at 84.1in a range of 78.4-87.0.

Bloomberg Trader Bias: Bullish 53% TW (17% LW), Bearish 32% (56% LW), Neutral 16% (28% LW)

BEANS              

DOWN 5

Lower on thoughts of waning export demand, while decent, some are fearing that is may not develop like recently anticipated.  Some say Chinese crush margins have been in a free-fall since the peak in mid April at $1.79/bushel, now having dropped some 30 cents this week alone.  That WOULD affect one’s appetite for bean consumption.  Yesterday, we saw the Brazilian Real drop down to a two 2 yr low compared to our US dollar.  Producer selling is increasing but at the same time being tempered by higher trucking transportation costs, especially in the interior.  They MAY see freight sky-rocket up as much as 150%!  Guessing the recent truck strike LIKELY didn’t ease any tension there.   Expect our US crop conditions to be unchanged to 1 lower from last week at 75% G/E and compared to 66% last year and 71% normally.  On Tues the market expects the 17/18 c/o to drop 6 mill to 524 in a range of 473-566 and 18/19 c/o increase 25 mill at 440 in a 395-702 range.  The SA crop is expected to show the Argentine crop drop 1.2 MMT to 37.8 and Brazil’s increase by 0.3 MMT to 117.3.

Bloomberg Trader Bias: Bullish 21% TW (22% LW), Bearish 26% TW (50% LW), Neutral 53% TW (28% LW)

 

WHEAT

DOWN 7

Saw both sides today in front of the warm weekend and ahead of Tue’s report.  Bloomberg expects the 17/18 c/o to increase 9 mill to 1.079 bill bu (compares to the USDA last month at 1,070).  The 18/19 c/o are expected to be 2 mill higher at 957 in a 820-994 range.  US HRW harvest progress got set back yest due to rain in KS/OK border area, but expect it to be back in action this weekend.  KS has had a few more samples run showing more evidence of protein variability and additional TW dropping due to earlier freeze damage.

Bloomberg Trader Bias:  Bullish 33% TW (18% LW), Bearish 33% TW (53% LW), Neutral 33% TW (29%LW)