COMMENTARY 6/29/18

The heat has arrived and there was no shortage of strange happenings.  It’s Fri, month end, second quarter end, first notice day for July fut, pollination starting, AND it is a pseudo-holiday weekend with July 4th falling smack-dab in the middle of next week.  Another 1-2″ of rain is expected for the N Corn Belt this weekend to go along with the heat.

 CORN

UP 5

Funds were big sellers yest and big buyers today!  Fundamentally though, it could be said that futures are defying logic, but after recent drops, it IS still a welcomed change.  The report was rather bearish, even with the good growing weather aside.  Acreage was 700k larger than the avg guess at 89.1 and 1.1 mill more than on the Mar report.  With harvested acres at 81.8  and assuming a 174 bpa yield, production would increase by 180 mill to 14.228 billion.  Stocks too were 30 mill larger at 5.306 bill as expected. The USDA’s demand est for 18/19 is 14.615 bill bu would equate to a 1.765 bbu C/O, giving us a 12.1% stocks to use ratio.  Crop conditions will be out again on Mon afternoon!

 

BEANS              

DOWN 3

Mixed.  Not as rosey as the other commodities, but DID make a valiant effort until the end.  China rumors releasing US beans from tariff did not occur last night, but there IS always next week.  There WAS a new sale of 130K MT of 18/19 beans sold to Mexico!  The report added 600K acres, bringing the total to 89.6 mill acres.  Harvested acres were 88.862 mill and assuming the current 48.5 bpa trendline yield, would add 30 mill to Production to make a 4.310 bill bu crop. Stocks were 1.222 bill, right with the avg guess and 256 mill greater than last report.  Tariff issues are still up for debate and the PRC’s Ag Attache is reducing their 18/19 soybean imports down by 2.5 MMT.

 

WHEAT

UP 18

Funds were buyers today.  But, like in the row crops, today’s report was bearish.  Larger acres of 47.821 was an increase of 482k and a few more than the 47.1 expected by the avg guess.  Stocks were actually down 81 mill bu at 1.1 bill.  We’ll keep watching the dry world weather in Russia, Canada, Australia, Argentina, and also France.