Blogging by the Bushel
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Market Report

Wednesday June 27th, 2018

July corn closed unchanged at $3.52 ½ and December closed unchanged at $3.73 ¼. July soybeans closed up ¼ at $8.67 ½ and November closed up 1 ½ at $8.89. July wheat closed up 10 at $4.79 ½ and September closed up 5 ½ at $4.88 ½. Crude oil closed up $1.98 at $71.26.

The corn market remained quite choppy as traders sew up positions in front of important month end reports and deliveries. Corn spent most of the day on the “plus” side of the ledger, but once again had to endure a mid-day wave of selling that briefly took the market lower on the day. Futures would end near unchanged as July continues to hug the $3.50 level mighty tight. Managed Money traders were viewed small sellers today.

There was not a lot “new” to discuss today. Rains remain around the Midwest, including some very beneficial precip in dry southern Illinois. The next two weeks are expected to trend dryer and warmers across the Midwest, which is a change worth noting, but there is more than enough soil moisture around to support continued favorable growing conditions.  There will be some rains around this weekend to “top off” the central Midwest.  No story here, yet. The only major world weather concern is portions of EU/FSU. Forecasts from Ukraine’s weather bureau hint at some damage to corn yield potential there. They see a 26.8 mmt harvest coming, which is technically better than last year, but is well below current USDA estimates of 30 mmt for the crop.  Brazil is also coming to terms with a reduced second crop harvest, though how much damage was done there is still up for debate. Harvest is well underway there and is over half done in Argentina’s (first/only) crop.

The soybean market struggled to hold strength today but still managed a very modest reversal higher. When the rally in meal gave up the beans also lost their early leader and momentum.  Today’s price action demonstrated how difficult it is and is going to be to sustain rallies in the current environment where crop conditions, trade uncertainty and the anticipated bear report on Friday limit upside enthusiasm. It was a quiet day of trade with volumes trending down each day and that likely will continue as we head into Friday’s early Independence Day fireworks show with first notice, end of quarter fund flows and of course, the stocks and acreage reports. July weather forecasts are hinting a hot and drier pattern and we have an important trade deal coming up on July 6th.

The crop report on Friday is expected to show around 89.7 million bean acres, up 700,000 from the March estimate but down 90.1 million last year. Stocks are estimated at 260 MB larger than this time last year a new record 1.225 for June 1st. The weather to this point in the growing season has been supportive of excellent crop conditions.  We are now seeing some issues developing where parts of the Midwest have been deluged with too much rain and this is creating some disease and scraggly looking soybeans as they sit with ‘wet feet’.  SE SD, N IA and E NE represent the epicenter of this issue and are set for additional rains through this weekend before the drier and welcomed bias takes over for early July.

For a second consecutive day the wheat complex finished a little better. Unlike Tuesday when the rally was unable to hold into the day session, today’s price action maintained those gains and traded a little better throughout the day. After a two-week $.73 break in Chicago Sept wheat it was nice to see a positive finish to the day. Not saying that the markets have turned any corners, but traders are still hopeful for positive data to come out of the crop report Friday. Looking ahead to the rest of the week, the markets will have plenty of data to look at and digest. Export sales is first up Thursday morning. Last week’s sales came in at the high end of expectations at 462 MT, and with prices in retreat mode, tomorrow might even be better than last week. We will eventually start to need good weeks as sales are already behind last year’s pace 183 mil bu vs 277 mil bu last year. Look for sales tomorrow to come in between 400 and 500 TMT.

Anna Kaverman

anna@mercerlandmark.com

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