COMMENTARY 5/27/15

 A large system with a cool front should continue to generate rain chances through the weekend, limiting planting rates and keeping already wet HRW even wetter.  More scattered storms return early next week.  Half of HRW areas of CO, OK, and TX received at least 90 day’s worth of rain the past month.

St Louis river level RISING at +22.1 and forecast to be 23.4 by 5/31.

CORN          

DOWN 5    

More new lows and even more folks putting bushels in on free dp, convinced that that market needs to go higher.  If they ride it down long enough, sooner or later they will be right.  Weakness today was compliments of a Crop Rating of 74% G/E, planting ahead of average, decent growing forecasts, and a stronger dollar.   Yesterday, planting  was reported at 92%, 1 point less than the trade average but 4 ahead of the 5-year pace.  The Condition of 74% G/E surpasses average trade guess of 72%.  It’s not a record as the previous late May/early June was 81% in 1991.  China has paid $US 3 billion for a bioengineered seed program to seek to improve yields on marginal lands and reduce foreign food dependency.  Are they headed for GMO acceptance?

TUES’ Crop Progress:

US PLANTED 92% TW, 85% LW, 86% LY, and 88% AVG.  The State of IL PLANTED:  97% TW, 94% LW, 93% LY, and 93% AVG.

US EMERGED:  74% TW, 56%LW, 56% LY, and 62% AVG.  The State of IL EMERGED: 87% TW, 75%LW, 78% LY, and 75% AVG.

US CONDITION: 74% G/E       STATE OF IL CONDITION: 80 % G/E

Bloomberg Trader Bias:  Bullish: 26% TW (28% LW), Bearish 41% (34% LW); Neutral 32% (38% LW)

 

BEANS     

UP 4

The market likes US beans for July as well as bean meal. New crop grudgingly eased lower. Yesterday’s planting pace was at 61% …just 1 point below the trade estimate.  The Rosario Port problems persist in South America and Indonesia’s palm oil exports have reached a five month high on falling prices and weaker currency with sharp gains to India and China.

TUES’ Crop Progress:

US PLANTED 61% TW, 45% LW, 55% LY, and 55% AVG.  The State of IL PLANTED:  69% TW, 47% LW, 60% LY, and 57% AVG.

US EMERGED:  32% TW, 13%LW, 23% LY, and 25% AVG.  The State of IL EMERGED: 38% TW, 14%LW, 29% LY, and 29% AVG.

Bloomberg Trader Bias:  Bullish: 6% TW (6% LW); Bearish: 62% (69%); Neutral: 22% (18%)

 

WHEAT          

DOWN 6

Winter wheat ratings held steady.  More old crop EU soft wheat competition and the new crop in Russia and the Ukraine is looking favorable.

TUES’ Crop Progress:

Winter Wheat Headed:  77% TW, 68% LW, 68% LY, and 67% AVG.  The Stat of IL Headed:  89% TW, 70% LW, 70% LY, and 83% AVG.

Winter Wheat Ratings:  45% G/E, 45% LW, and 30% LY.  The State of IL Ratings:  59% G/E, 57% LW.

US Spring Wheat Planting progress:  96% TW, 94% LW, 70% LY, and 79% AVG.  Emergence:  80% TW, 67% LW, 40% LY, and 54% AVG.

The Fund’s position is NEAR RECORD SHORT at -97,610 contracts or 488 MILLION bu.  (The previous record they have ever been is – 111,373 contracts.)  Funds are still carrying the vast majority of their giant SHORT and still beckons our attention.  

Bloomberg Trader Bias: Bullish 50% TW (41%LW), Bearish 32% (31% LW), Neutral 18% (28% LW)