Blogging by the Bushel
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The calendar has flipped from May to June, but it would appear that markets are singing the same old song. Corn and beans both are continue to sing the blues. It appears that just about everything east of the Rocky Mountains saw rain over the weekend and while that has been excessive in the south and there were some abnormally chilly temperature north, the general attitude appears to be “rain makes grain.”  Once again the speculative funds seem rather content to play the bear card. Late last week they added to their already sizeable short positions in corn, beans and wheat.

In the southern hemisphere, the crushers union in Argentina agreed to a 27.5% hike in pay so we can look for that nation to become a force in the export trade again quickly, which would appear to be the stimulus for the pressure in beans today.  Safras updated their projection for Brazilian bean production bumping it up 1 MMT to 95.4 MMT and AgRural estimates that Brazilian farmers have sold 68% of old crop beans and 6% of new crop, which compares with 75% and 2% respectively a year ago.

As you undoubtedly have seen, the EPA finally released bio-fuel guidelines (under court order) last Friday and while it eliminates the uncertainty of it all, mandates for ethanol were at the lower end expectation and I suspect were responsible for deflating the strength in corn last Friday.  Bean oil in turn caught a boost.  For 2015 the fuel industry is mandated to blend 13.4 billion gallons of ethanol and then 14 billion in 2016.

As far as fresh news to concentrate on this week, it is relatively sparse.  The dollar is firmer and metal and energies are soft.  This afternoon we will see the updated planting and condition updates.  The trade is expecting to see corn planting north of 95% with good to excellent condition possibly improving 1 to 2% keeping it in line with a year ago.  Bean planting should be around 75% complete and with the excessive water in the Southern Plains, winter wheat conditions will likely show little change.

For now, bears appear to hold all the face cards but as we know, the real test for crop lays out in the months ahead.  I would not be surprised to see the month of June provide us with rather stagnant sideways overall trade.

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