COMMENTARY 7/6/18

Drier and warmer than normal for the next two weeks, according to the forecasts, but a look at the radar indicates different.  A BEAUTIFUL weekend is in store, BUT:  hold your breath! – Hurricane “Beryl” is on its way towards those poor pilgrims in Puerto Rico this weekend, bringing 100mph winds by the first of the week.

 CORN

UP 8

Today’s activity is proof that the market WAS oversold.  Funds were seen buying in part of their big short.  Export Sales were 17.3 mill vs expectations of 20 -31 and only 5 needed per week. Big buyer’s were Mexico, Vietnam, and Egypt.  New crop sales were a little skimpy at 9.1 mill vs expectations of 12 – 20.  The next crop prod report will be out thurs 7/12 and we could see up to a 50 mill bu increase in May exports!  On Monday, our crop ratings are expected to decline 1 to 2 from 76% last week, but STILL above last year’s 65% G/E.  In SA, ANEC reduced their est of Brazil’s exports by 2 MMT from 28.  Agroconsult has also lowered theirs from 31 down to 28 due to interior freight issues.

Bloomberg Trader Bias: Bullish 67% TW (53% LW), Bearish 13% TW (32% LW), Neutral 20% TW (16% LW)

 

BEANS              

UP 38

To quote Twinkie, The Kid, “yaa-hoo!!”  Funds were REALLY buying out of their short in style!  The US has put our tariffs in place and the China is enacting their planned retaliations.  We are getting down to the gnat’s of the wire on the tariffs!  It is getting down to flat out DEMAND.  Export Sales WERE ABOVE thoughts at 20.6 mill bu vs expectations of 7 – 18 mill bu.  Included in the was the fact that China DID cancel some 13k and the total was STILL big!  Big buyers were Netherlands, Bangladesh, Vietnam,  and Mexico.  A comparison of values has PNW beans from the US just 30 some cents from working their way into Brazil to either feed their crush plants OR for them to potentially resell.  Like corn, ratings on Mon are expected to be one lower at 70% G/E, still eight higher than last year  and three higher than the normal of 67% G/E.

Bloomberg Trader Bias: Bullish 33% TW (37% LW), Bearish 13% TW (32% LW), Neutral 53% TW (32% LW)

 

WHEAT

UP 10

World issues and follow through buying from the row crops. Export Sales were 16.2 vs expectations of 11 -18 and 15.2 needed per week.  The bigger buyers were Taiwan and Mexico. Harvest continues to work its way into the N into HRW territory.  Harvest is 25% complete in Colorado and KS 80%.

Bloomberg Trader Bias:  Bullish 71% TW (37% LW), Bearish 0% (32% LW), Neutral 29% TW (32% LW)