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Archive for June, 2017

Market Report

Friday June 30th, 2017

July corn closed up 10 ¾ at $3.70 ½ and December 17 corn closed up 12 at $3.92. July beans closed up 26 ¾ at $9.42 ¼ and November 17 closed up 30 at $9.54 ¾. July wheat closed up 30 ¾ at $5.11 and September closed up 30 at $5.26.

Corn’s surge on Friday closed it higher for the week, lower for the month and higher for the quarter. The September settled above the 50- and 200-day average for the first time in two weeks. USDA reported corn acres at 90.9 million, which was slightly higher than many trade estimates and was up from USDA’s March forecast of 89.996 million. The year-ago acreage was 94 million. Harvested acreage was estimated at 83.496 million versus 2016’s nearly 86.75 million. Increases from a year ago were noted in wheat states such as Colorado, Kansas and North Dakota, while Midwest acreage decreased. Quarterly corn stocks of 5.23 billion bushels topped the average trade estimate and were above last year’s 4.711 billion. In the weather, the seven-day forecast favors rain for the Midwest with the greatest amounts in Missouri and southern Illinois. Temperatures have moderated in France and Germany after the recent heat wave, but the weekly forecasts show hot weather will continue for crops in eastern Ukraine and southwest Russia. Eastern Ukraine appears dry, while southwest Russia could have light showers.

Soybeans were short covering in front of the USDA report but the market mentality remained bearish and was largely positioned as such. The crop report today failed to deliver on the acreage side with planted acres 260k less than the trade estimate which in the grand scheme of things is not a big difference, but was enough to trigger a sharp $.30 rally as shorts exited positions.  The stats in beans remain bearish but the market mentality has changed into a more defensive posture with a focus on production threats.  That likely means the recent lows will be good lows at least until the market feels better about crop conditions and that will require moving the calendar forward to find out – if weather does not cooperate all bets are off.  Markets will close early on Monday and won’t re-open until Wednesday a.m. for Independence Day.

Here’s what the report said:  US soybean planted acres were 89.513 which was up from the March intentions of 89.482 but below the trade estimate of 89.750 so the market was disappointed in this number as evidenced by the flat price response topside. Just as important is the location of some of these acres with the current drought and the forecasted ridge in the west that will place crops in harm’s way:  ND 7.2 millon, SD 5.4 million, KS 4.75 million. June 1 quarterly stocks totaled 963 mb which was 20 mb below the average trade estimate but 93 mb above stocks this time a year ago.  The stocks are positioned as 332 mb on farm and 631 mb off farm.

The wheat complex saw strong gains across all three classes overnight, and that trend continued during the day. Some of the overnight strength may have come out of Europe with French wheat conditions lowered another 3% from a week ago, the IGC lowering world wheat production forecasts and EU productions estimates being lowered around 2.4 MMT. Data from the crop report showing Spring wheat acreage much below analysts’ estimates reinvigorated trade and prices raced out to more than $.53 higher in Sept before settling some $.20 off those highs. Still, it was an impressive week for Mpls wheat, settling more than $1.06 higher. This was the strongest weekly close since the summer of 2008 when we saw dollar moves on a weekly basis. Chicago Sept settled limit up, but since it was the only month that settled limit, we will not have expanded limits Sunday night. For the week, Chicago settled more than $.51 higher.

Crop Report data:

What the USDA Crop Report said: 2017 US all wheat planting intentions came at 45.657 mil acres versus 46.059 mil back in March and slightly below the avg estimate of 46.07 mil acres. Winter wheat was said to be 32.839 mil acres, in line with most analysts’ expectations and slightly above the March number of 32.75 mil acres. USDA quarterly wheat stocks were actually the bearish data of the report, but that was quickly an after-thought. As of June 1, stocks were put at 1.180 BB. Quarterly stocks back on March 1 was 1.655 BB, and the avg guess was for a slight reduction and in this report last year we had a stocks number of 976 MB.

Anna Kaverman

anna@mercerlandmark.com

By~ Ben Stoller

At this point in the growing season, careful consideration should be given to herbicide applications’ effects on next year’s crops.

For growers sowing wheat after soybean harvest, spraying Fomesafen containing products such as Flexstar® and Prefix® and others such as FirstRate®  and Warrant®/Warrant Ultra® have 4 or 4 ½ months restriction on crop rotation to wheat.  Growers considering wheat and these herbicides should be making applications immediately or making alternative plans.

For soybean fields going to corn, care should also be taken when Fomesafen products are considered, as a 10 month corn restriction exists.

The 2017 Ohio, Indiana and Illinois Weed Control Guide contains an informative chart on pages 194-196 showing crop rotation restrictions; a sample is below.

What’s most important to remember is that many rotation restrictions are already past or will be very soon.  Applications need to be made not only to meet deadlines, but also to target weeds while they’re small in order to have satisfactory control.

Please contact your local Mercer Landmark agronomist for assistance in choosing crop protection options that fit your weed challenges and crop rotations.

Market Report

Thursday June 29th, 2017

July corn closed up 3 at $3.59 ¾ and December 17 corn closed up 3 ¾ at $3.80. July beans closed up 1 ½ at $9.15 ½ and November 17 closed up 3 at $9.24 ¾. July wheat closed up 23 at $4.80 ¼ and September closed up 23 at $4.96.  Crude oil closed up $.21 at $45.20.

Without a doubt, wheat was the star of the show today. Corn assumed the role of “extra” or maybe even “stagehand”. Early wheat strength did push corn a nickel higher mid-day, but it was not difficult to tell that the enthusiasm just wasn’t there.  The funds viewed buyers of about 10,000 corn today, which would pare their net short back to roughly 130,000 contracts. CFTC data tomorrow late will be eagerly watched to get a better handle on fund counts after last week’s large July option expiration. “Rain week” continued, though locally-heavy 5-6 inch totals in NW Missouri were certainly not welcomed. Only a few areas benefitted, including NE KS, far N IL, and parts of MI.  There is still plenty of rain “loaded up” on the five day precip maps, so the market is somewhat taking a wait-and-see approach to see if rains fall in the right places and in the right quantities. Export Sales remain depressing. A cargo of old crop corn was switched out of “unknown” and to “China”.

Soybeans continued their recovery trade ahead of the crop report but struggled to hold its gains. While wheat is providing leadership the soybean market has seen some short covering that is inspired by the crop report and also some uncertainty in the weather forecasts as the models debate the significance and scope of the ridge that sets up in early July. There is no model consensus but they do generally agree that the N Plains and W and NW Belt to be most vulnerable to the heat due to limited moisture. The report comes out tomorrow at 11.  The avg. estimate for US June 1 soybean stocks is 983 mb vs. 872 mb last year – there is room for the USDA to increase old crop demand on the balance sheet so stocks could end up tighter than estimates.  The avg. estimate on US soybean planted acres is 89.75 million vs. 89.48 on March 31st and 83.43 last year.

The wheat complex continues to be led by Mpls, but at least for today, Chicago and KC have become more willing participants. Spring wheat finished the night $.35 higher and extended their gains once the day session started, with the Sept briefly touching limit up ($.60 higher) and the July reaching $.64 higher. Chicago Sept traded out to its highest level since February 16. The Mpls grain exchange raised margins again, effective at the close of business today, and many times this reigns in some of the enthusiasm that gets built up in the market, if only for a day. The data from the US Crop Report Friday morning will be an influential factor in deciding if the Spring wheat rally of 2017 continues. Stats Canada data this morning was very supportive to price action. The 2017 crop planting report showed all wheat at 22.361 mil acres. This is below expectations of around 22.7 mil acres, and well below April intentions of 23.18 mil acres. Last year’s all wheat acres totaled 23.21 mil. Spring wheat acres in 2017 are pegged at 15.791 mil vs April’s intentions of 16.64 mil acres.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Wednesday June 28th, 2017

July corn closed down 2 ½ at $3.56 ¾ and December 17 corn closed down 1 ¼ at $3.76 ¼. July beans closed up 2 ¾ at $9.14 and November 17 closed up 4 ¼ at $9.21 ¾. July wheat closed up 4 at $4.57 ¼ and September closed up 4 at $4.73. Crude oil closed up $.50 at $44.99.

It’s raining in the waning days of June, so it probably shouldn’t surprise anyone that corn would struggle today.  Futures finished 1-2 cents lower, which left the July contract within a fraction of a cent of last Friday’s low. Outright volumes were fairly poor, as most traders focused on the spreads ahead of First Notice Day Friday. The funds were believed net sellers of up to 10,000 contracts, which would leave them close to 140,000 net short heading into “position day” Thursday.  Weather, weather, and more weather!  Beneficial rain fell this morning from eastern Nebraska and SE South Dakota to Iowa and Minnesota, with eastern North Dakota seeing rain as well.  Rain totals ranged from as little to 0.15 inches to as much as 2.  Cooler than usual temperatures also persisted in most areas, though this is trend is expected to end soon, as 80′s and even 90′s start to creep into the forecast for the Central Corn Belt not long after July 4th.

Soybeans continue to build on their reversal as we begin another mini recovery cycle in front of the crop report on Friday. The rally is having trouble gaining much traction because of the weather which features abundant rain fall across much of the Midwest for the coming 4-5 days before July brings warmer temps and a drier bias returns particularly for the western belt and northern plains. The forecasts continue to shift with the ridge and its potential impact and scope next month, but the uncertainty should offset some of the bearishness of the current rains leaving us with an indecisive trade for the moment. We have a trio of reports to watch for the next two days and obviously, Friday’s report will have the potential to move prices significantly. The avg. estimate for US June 1 soybean stocks is 983 mb vs. 872 mb last year.   The avg. estimate on US soybean planted acres is 89.75 million vs. 89.48 on March 31st and 83.43 last year.

The wheat complex continues to be led by Mpls, as Spring wheat settled more than $.23 higher after trading out to more than $.31 higher. Demand for high protein wheat is inelastic. There is no limit as to how strong Mpls can get. The current concern is that the Spring wheat crop comes out at 55 lb test weight and 15 or 16 protein. There could be record Canadian spring wheat imports. Wheat values have raced well past corn values. There is going to be a lot more corn fed than wheat around the world in the coming year. The US Crop Report is Friday. It’s a big one. For acreage, average expectations are for 46.07 mil acres of wheat planted vs 46.059 mil on March 31 and a 2016 final figure of 50.154 mil. Of this total, 32.830 mil is winter wheat (vs 32.747 in March). For quarterly stocks, the average expectation for US wheat stocks as of June 1st is 1.137 BB vs 1.655 bil on March 1 and the 976 mil bu on June 1 of last year.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Tuesday June 27th, 2017

July corn closed up ¼ at $3.59 ¼ and December 17 corn closed up ½ at $3.77 ½. July beans closed up 4 ½ at $9.11 ¼ and November 17 closed up 3 ¾ at $9.17 ½. July wheat closed up 3 ½ at $4.53 ¼ and September closed down 1 ¾ at $4.69. Crude oil closed up $.88 at $44.49.

“Uninspiring” was probably the best word to describe corn’s performance Tuesday. Futures traded as much as $.05 higher but saw those gains slowly melt away into the final hour. Spread volumes were quite active as we inch closer to July’s First Notice Day on Friday. The funds were viewed small net buyers as they pare back shorts in front of the report. It is estimated that they are net short roughly 130,000 contracts. The markets received an early boost from Monday’s “unchanged” corn condition surprise, and likely helped extend some on weaker trade in the US Dollar. As can often be the case, though, such bounces often tend not to carry very far. The overall weather picture is not much changed from yesterday. Good rain coverage is expected for the Midwest this week, though some amounts could get locally heavy (4-5+ inches) in a stretch across the IA/MO border into W IL.  Late June and early July rains are not often friendly to price, but more heat continues to show in the 6-10 & 8-14 day maps.  So the attitude of “bearish now, cautious later” seems to be the theme. The world scene remains more mixed.  China looks good, Western Europe is improving after their recent brush with heat, while concern remains in Eastern Europe and Ukraine.  The next ten days are expected to be quite hot/dry for the latter, which will put stress on crops.  Ukraine corn is roughly in the same developmental stage as their counterparts in the US.  Brazil off-take is expected to expand in coming weeks on continued good harvest weather.

Soybeans continue to build on their reversal as we begin another recovery cycle in front of the crop report on Friday. These rally/break cycles appear to be speeding up where the April/May rally lasted 6 weeks followed by a 2-week decline, the June rally lasted just 3 weeks followed by a 1-week decline. We are on day 2 of what could be another min rally cycle as we head towards the crop report on Friday. Part of the reason for today’s performance is the near term rains in the forecasts before the heat returns a week out. Forecasts show substantial Midwest rainfall over the coming 5 days – although the mid-day models did reduce some of the moisture totals for the upper Midwest while increasing some of the totals further south. The avg. estimate for US June 1 soybean stocks is 983 mb vs. 872 mb last year.  The avg. estimate on US soybean planted acres is 89.75 million vs. 89.48 on March 31st and 83.43 last year. A little history of the June stocks and acreage report. In the past 10 years the average daily price range on report day is $.51 with the avg. close being up $.31 cents. This is why the market takes this number so seriously and respectfully.

The wheat complex was a little better overnight and remained firm during the day, once again led by Mpls. Condition reports Monday afternoon reporting a further decline in the Spring wheat crop, combined with the six to ten day maps showing above normal temps and below normal precip through Montana and the Dakotas was the catalyst to Tuesday’s move. Granted conditions were only off 1%, but with South Dakota already 85% headed and 62% of the crop P&VP, much of the wheat crop in the western two thirds of that state may be already doomed. Conditions across Montana are on its way to seeing the same issues, with that state showing P&VP conditions at 36%. There is also some fear developing that that the heat and limited rains will stretch out to the Canadian prairies, which may add fuel to the fire.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Friday June 23rd, 2017

July corn closed down 5 at $3.57 ¾ and December 17 corn closed down 5 ½ at $3.75 ¼. July beans closed down 14 ¾ at $9.04 ½ and November 17 closed down 2 ¼ at $9.11. July wheat closed down 1 ½ at $4.59 ¾ and September closed down 1 ¾ at $4.73 ½. Crude oil closed up $.30 at $43.27.

FOR THE WEEK ENDED 6-23-17

CORN – All together now, it’s all about the weather, weather, weather.  Corn gapped lower from the previous Friday’s low as we began a fresh week and weekend rains were more beneficial than expected.  Funds were believed to be nearly even when the Sunday night bell rang.  With updated maps, they set their buying shoes aside, resumed selling and pushed us back into the $3.60 to $3.80 trading range we saw from mid-March to early June. We closed lower for five straight sessions.  The pullback came despite the unchanged crop conditions for corn at 67% good/excellent, which was less than the 1%-2% improvement expected by the trade.  The corn line-up in Brazil is building at ports as they switch to shipping the huge corn crop instead of soybeans. Their corn vessel line-up is 2.4 mmt versus just 800 mt last year at this time.  Sluggish US export sales weighed on the markets late in the week to keep the negative attitude intact.

Weekly old crop export sales were below the lowest pre-report estimate at 20.8 million bushels.  Total commitments stand at 2.171 billion bushels versus the USDA’s target for 2.225 billion bushels.  We’ll see if the USDA makes any changes on the July WASDE report.  Mexico has bought 6% less US corn in the first four months of 2017 compared to the same period last year.  New crop sales were 4.9 million bushels, bringing total commitments to 113.3 million bushels.  The total commitment number is well below last year at this time when we had 177.4 million bushels on the books.  It’s estimated that US corn is $14 per ton out of the market to Argentina and Brazil is $4 per ton discount to US origin.

US weekly ethanol production fell from 1.002 million bpd to 990,000 bpd.  Stocks were down from 22.5 million barrels to 22.3 million barrels (947 million gallons to 936 million gallons).  Margins improved 2 cents per gallon to 8 cents per gallon.  This week’s cattle on feed report showed 102.7% on feed versus 102.4% estimated; placements at 112.2% versus 110.4% estimated; and marketings of 108.8% versus 108.5% estimated. The average trade guess for the June 30th Planted Acreage report is 89.78 million acres versus the USDA’s March forecast for 90.0 million acres and compared to last year’s 94.0 million planted acres.  The trade estimate for the Grain Stocks as of June 1st is 5.125 billion bushels.  Last year there were 4.711 billion bushels of corn stocks on June 1.

OUTLOOK:  For just the 2017 calendar year, December corn’s high was on June 8th at $4.09, and here we are on June 23rd setting the calendar year low at $3.75 (so far).  In only 12 trading sessions we went from the 2017 high to the low, so far, for a plunge of 34 cents per bushel.  December corn was down 26 ¾ cents this week at $3.75 ¼ per bushel. The July corn contract this week had its lowest settlement since December 2016.  It closed at $3.57 ¾ per bushel for a weekly loss of 26 ¼ cents.  The trade was willing to rally and the funds willing to cover their short position on hot, dry weather, but Mother Nature stepped in with milder forecasts and funds laced up their selling shoes again.  Speculators as of June 20th had rebuilt their net short position to 95,000 contracts.  The Australian Board of Meteorology cancelled the El Nino watch that has been in place for months.  They now say we are in a neutral phase through the second half of the year.  The upcoming June 30th Planted Acreage and Grain Stocks as of June 1st reports could hold a surprise; but realistically, unless changes are significant, weather will continue to drive price direction. It will also be month and quarter end on the same day as the big reports.  With plenty of old crop corn perceived to still be available and improving growing conditions, don’t be shocked if prices go lower than you might expect.

SOYBEANS – Soybeans tried to rally in post-weekend trading, spiking to $9.47 ½ per bushel Monday, but couldn’t hold the rally and closed lower.  That lower trend continued throughout the week, with soybeans closing lower for four out of the last five sessions.  July beans eked out a ½ cent higher close on Friday. Several issues kept pressure on prices including, improving weather forecasts, a 1% improvement in crop ratings to 67% good/excellent, chatter that China bought at least 25 South American soybean cargoes for shipment later this summer, fund selling, weak US exports, and expectations for increased soybean acres on the June 30th report.  Brazilian growers are estimated to have only sold 58% of their record soybean crop, compared to 76% sold on average by this time.  This may keep a shadow over the soybean market over the next several months. China’s unloading of soybeans has slowed as an investigation into how imported soybeans may have found their way into the food sector is undertaken.  Congestion at the ports is increasing.

US weekly export sales were a dismal 4.1 million bushels for old crop with a measly 100,000 bushels of new crop sales.  Old crop sales were the second lowest of the crop year and new crop sales the lowest in sixteen weeks. They stand at their lowest total for this time of year in the last ten years and are down nearly 45% from last year.  Buyers are not in any rush to make purchases, leading to the assumption they are not worried about upcoming supply. The EPA has pushed back the release of 2018 proposed biofuel quotas for at least another week.

The average trade guess for the June 30th Planted Acreage report is 89.86 million acres.  This compares to the USDA’s March forecast of 89.48 million acres and last year’s 83.43 million planted acres.  The last time the US planted more soybean acres than corn acres was in 1983 when we planted 60.2 million acres to corn and 63.8 million to soybeans.  The average estimate for the Grain Stocks as of June 1st report is 991 million bushel.  Last year on June 1, there were 976 million bushels of soybean stocks.

OUTLOOK:  Soybeans are following corn’s lead since the critical yield determination time for soybeans isn’t until August.  Prices took a big hit this week as weather forecasts improved and corn pressed lower.  Nearby soybeans posted their largest weekly decline in six months.  July soybeans dove 34 ½ cents lower for the week to close at $9.04 ½ per bushel.  The low in July this week was $9.00 ¼ per bushel and the contract low was set in August 2015 at $8.77 per bushel.  We’re not that far away from a new contract low.  Psychological support at $9.00 was held, but next support lies closer to $8.84 ¾ per bushel, but if weather continues to look favorable, we’ll be headed lower.  November soybeans were down 39 cents this week to close at $$9.11 per bushel.  The contract low in the November contract was set in August 2015 at $8.57 per bushel, which is within striking distance.  July meal plunged $7.30 per ton to $293.60 and soyoil was $0.015 lower at $.3161 per pound.

Let’s take a brief moment and look at Minneapolis wheat.  Drought conditions expanded in the Dakotas and eastern Montana.  This has been the impetus behind the tremendous rally. North Dakota alone produces 50% of the US spring wheat crop.  Minneapolis July wheat has soared $1.17 ¼ from the close on May 15th to the high on June 23rd!  It is overbought technically, but that doesn’t mean it’s ready to rollover.  Basis levels for high protein wheat in Minneapolis continue to strengthen.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Thursday June 22nd, 2017

July corn closed down 6 at $3.62 ¾ and December 17 corn closed down 6 at $3.80 ¾. July beans closed down 14 ¾ at $9.04 and November 17 closed down 14 ½ at $9.13 ¼. July wheat closed down 3 ¼ at $4.61 ¼ and September closed down 4 ¼ at $4.75 ¼. Crude oil closed up $.22 at $42.97.

The corn market was nothing if not consistent this week, finishing lower each day Mon-Thurs. Bears capped it off taking the July contract back to the very bottom-end of the infamous trading range from this spring/winter. Funds were viewed net sellers of about 15,000-20,000 contracts today, which would leave them net short roughly 90,000 corn. Commercial buying was noted in corn, particularly south of $3.65 CN. Weather remains the primary influence on trade, and it is mighty difficult to stem any excitement when it’s cool and wet into early July.  That being said, there were some positive developments early.  First, some of the extreme heat from the US SW appeared to sneak into the far Western Corn Belt, with 90′s reported into Nebraska. Second, the GFS model once again trimmed back rains in the Eastern Belt next week. Still, a mostly favorable outlook is expected over the next two weeks for the Midwest, which is what the market has chosen to focus itself on. Export Sales were unremarkable; 528,800 MT old, 124,000 MT new. Old crop sales were 16% above recent averages, but not enough to shift sentiment of the day.

Soybeans established a new low to $9.04 which has nearby beans threatening to put an 8 in front of its price for the first time in 14 months. Trade volume picked up today but it wasn’t hedge volume. It seemed to be more spec/fund selling. Funds were estimated sellers of 12,500 contracts which by our estimates makes them sellers of 35,000 since Monday and net short around -134,000. The latest break in beans has been triggered by improved crop conditions and weather forecasts that led to a reversal trade out of new recovery highs on Monday and the selling has not let up since.  A disappointing export sales number this morning didn’t help matters but make no mistake this move is weather driven and the market sees no production risk with the current forecasts into early July so we are taking out premium as the shorts pile in. Weekly export sales were a miss at just 115 MT combined. Soybean sales were down 67% from last week and down 72% from the 4-week average with no sales to China.

Trade overnight across the wheat complex was an almost exact duplicate as what we saw the other night, with futures starting a little lower, and extending losses once the European markets opened. Hard to tell what was behind the late morning rally in Mpls. There remain concerns of the quality issue of protein content in the HRW crop that will tend to support spring wheat values, but producers are starting to find some better protein as the wheat harvest moves into the west central parts of Kansas. Some reports of strong test weights along with 11 to 12 protein. Just getting started so will have to see how widespread it is. Also hearing stories of insurance zeroing out production on some acres. Regardless, Mpls continues to be the leader. Export Sales this morning were at the high end of expectations, coming in at 543 MT.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Wednesday June 21st, 2017

July corn closed down 1 ¼ at $3.68 ¾ and December 17 corn closed down 1 ¼ at $3.86 ¾. July beans closed down 9 at $9.18 ¾ and November 17 closed down 11 at $9.27 ¾. July wheat closed down 8 at $4.64 ½ and September closed down 8 ¼ at $4.79 ½. Crude oil closed down $1.02 at $42.75.

The corn market was confined to a narrow range today, but did continue the theme of overall weaker trade this week. Funds were viewed close to net even today, as they hang with a pared-down net short in the market of roughly 70,000 contracts including options. There was a little excitement early in the session after weather maps removed a significant quantity of rain from the outlook. Rain was reduced for the Central and Eastern Corn Belt outside of the Ohio River Basin into Friday of this week.  Perhaps offsetting this was ideas of cooler/wetter weather into the first days of July, at least according to those that follow the GFS models. Not all models agree with that extended outlook, though, but the market seemed to use that to offset some of the bullish changes up-front. Note that the tropical storm moving the Gulf tends to introduce some “choppiness” into the GFS, so keep your weather man close for a moment. The weekly EIA report was considered “friendly” to ethanol, but the market really didn’t take much notice. Production slipped -1.2% wk/wk to 990k bbl/day.

Soybeans extended their decline as improving crop conditions and a non-threatening near term weather outlook continue to pressure the market off its recovery highs. The daily chart indicators have turned lower and the violation of last week’s spike low sets the table for a potential challenge of the recent lows for the move established at the end of last month. On the longer-term charts, weekly beans currently have an outside weekly lower working and new lows are not far off. Trade remains light with little fresh news around today but that can change right in front of us. Besides weather, the key inputs to look for are tomorrow’s export sales report and then Friday we get July options expiration. The June quarterly stocks and acreage report is creeping up on the 30th and it is expected to reinforce the bearish domestic and global supply side stats for soybeans. Trade estimates for tomorrow’s export sales for old crop beans 200-400 and 150-350 new crop.

The wheat complex started the night a little lower, extended losses once the European markets opened, and continued to weaken as we neared the morning break. Trade tried to firm a couple different times during the day, but each attempt lacked any enthusiasm and prices weakened into the close, settling just off their session’s lows. Weather has been behind the recent ten Euro rally in the European Matif wheat contract as extreme heat entered the picture this week putting about 60% of French and 25% of German wheat under stress. This heat also moves into Ukraine later this week that opens the door to stress the wheat. This has led to an early start to their harvest. Some private forecasters are already downgrading the European crop and some of the surrounding countries crops.

Anna Kaverman

anna@mercerlandmark.com

Market Report

Tuesday June 20th, 2017

July corn closed down 5 ¼ at $3.70 and December 17 corn closed down 5 ¼ at $3.88. July beans closed down 10 at $9.27 ¾ and November 17 closed down 9 ¾ at $9.38 ¾. July wheat closed up 5 ½ at $4.72 ½ and September closed up 4 ¾ at $4.87 ¾. Crude oil closed down $.92 at $43.77.

Corn trade maintained a defensive posture Tuesday, finishing lower. A brief overnight flirtation with a “Turnaround Tuesday” bounce did not hold together into the morning, and the corn market gradually down-ticked throughout the day. The funds were viewed net sellers of another 15,000 contracts today, which would leave them short a net 70,000. Apparently recent rains prompted farmers to sell a little old crop, which likely contributed to corn’s lower start. It rained this weekend, there is a good chance to see more rains yet this week, and odds are good of yet more rains in the two week outlook as well.  A tropical storm is also expected to bring some rains to the Eastern Belt, overall increasing rain totals relative to forecasts made in previous days. Unfortunately for Europe, things aren’t quite so rosy. Dryness and heat stress continues to expand across Western Europe, and Ukraine has had a dry June-to-date.

Soybeans followed yesterday’s downside reversal out of new highs with a deeper break as the market reacted to improving crop conditions and bearish forecasts promoting good rains this week.  Soybean oil also retreated sharply lower as the rumored EPA announcement continues to be pushed back with the latest talk that instead of tomorrow we are looking at next week. Additionally, there was a currency component to the weakness as the dollar rallied to a one-month high and the Brazilian real had an outside day lower threatening to break down its recent range (weakness in the real futures adds value to the Brazilian soybeans making the farmer a more willing seller). From a daily chart perspective, beans and oil both had become overbought as we pushed into resistance so we have a technical component to the selling as well. The key trade to watch on the bean chart near term will be last week’s spike low, a close below that level would suggest an interim top is in place and position the market for a challenge of the June 1 lows.

The wheat complex started the night strong, led by Mpls which saw a third consecutive drop in conditions Monday afternoon. When the day session started the bid gradually returned, and as expected it was Mpls that led the way once again. Wheat has gained sharply on corn taking wheat out of the rations unless cash basis for lower protein gets back into the game of making wheat look for a home. Right now it appears the storage bin is the target for most farmers. It is worth mentioning that the European market does settle around two hours before the US markets close, and it was during this latter half of the session when we saw the US markets firm. Do not be surprised if Matif at least starts a little better. They actually have an element of support with the extreme heat entering the picture this week putting about 60% of French and 25%of German wheat under stress. This heat also moves into Ukraine later this week that opens the door to stress the wheat. This has led to an early start to their harvest. Heat in northern EU may reduce yields, but improve quality due to the stress. Dry heat in Southern EU will reduce crops hard and drive imports.

Anna Kaverman

anna@mercerlandmark.com

By~ Jeff Prickett

I wanted to follow-up on few points I made in my last blog. This is the time of the year we are making dry fertilizer applications after 1st and some 2nd cuttings on alfalfa hay. I have had a few customer conversations about sulfur needs in alfalfa and how best to meet those needs. There is a misconception that 90% Elemental Sulfur will meet the sulfur needs for alfalfa yet this summer. While 90% elemental sulfur is an excellent source of sulfur, it does take time to convert to sulfate (SO4) which is the plant available form. The time that it takes elemental sulfur to convert to sulfate depends on several key factors which may include time, temperature, soil moisture, micro-organism activity and soil pH. As a general rule of thumb, elemental sulfur applications made this time of year will not become plant available for at least 60-75 days after application. I would recommend applying AMS (21-0-0-24S) which is readily available to the plant and saving the elemental sulfur application until late summer early fall when you put the crop to bed. Also, we should be tissue testing for other plant nutrient deficiencies such as potassium, phosphorus and boron.

A key point on boron is that it is very water soluble in the soil. I would suspect that boron applications made in the early spring have probably leached out of the soil profile. I would recommend tissue sampling for boron deficiency. If boron deficiency is indicated we can add Wolf-trax Boron or Boron 14.3% to your dry the fertilizer blend. If we are applying fungicide or insecticide to alfalfa, we can add (foliar) 4oz/acre of Wol-trax Boron or 1qt/acre of Winfield’s Max-in Boron.

On a different note, waterhemp is here! I have observed waterhemp breaks in most of northern Darke County with the worst being along the Indiana State Line. Most are geminating in corn fields that were sprayed with corn pre-emerge chemicals in April. Please be vigilant in your crop scouting efforts as the window is closing on control measures we can perform.

If you have any questions or concerns about crops, weed flushes (waterhemp) or your fertility program for alfalfa or any other crops, please feel free to reach out to any of us on the agronomy team here at Mercer Landmark. We are here to help!