Good Morning!
I hope you’re having a great week. My week has been solid as we didn’t get a deluge of rain with the tropical storm but instead has a nice easy three tenths to a half-inch. With previous forecasts calling for 2-3 inches, we were hopeful our recently planted ponds wouldn’t need a third round. It looks like our forecast is warm and dry for ten days to two weeks. I know many of you are looking at a pattern that is dry and fairly warm, so it will be interesting if this actually comes to pass. If we see the forecast come to fruition, we may finally get a weather market started. I know it’s not fun thinking about drought-like conditions, but it might be better for us in the long-run from a profitability standpoint. matt@agmarket.net
The bean market spent most of its time in the green on Wednesday while corn spent most of its time trying to trim losses and rally back closer to unchanged. We’ve seen the shine taken off corn and beans the last couple of days, much of the reasoning from my vantage point has been weather and positioning for today’s report. While weather could be stressful moving forward, the trade seems hesitant to buy into the kind of weather we’d need to make a dent in the crop size. The report today isn’t expected to be a big market mover as the June report is generally a quiet one. Outside markets were supportive as July crude oil settled slightly higher…crude was up 2 cents on Wednesday at $38.96. This was 95 cents off the high and $1.23 off the low. The DOW was quiet while the Nasdaq has made all-time highs two days in a row. The Dollar was sharply lower as talk from the Fed indicated further weakness in the Dollar is possible.
Corn – The corn market fought all day to move closer to unchanged but settled lower when it was all said and done. July corn settled a penny and a quarter lower at $3.26. This was a penny and three-quarters off the high and 2 cents off the low of the day. The EIA report from the Department of Energy was up again…this time for the sixth week in a row at 85 million bushels of corn usage. This was another 7 million bushels above last week and 32 mb off the marketing-year low. The corn market looked to be breaking out last last week into Monday, but the last two days indicate there might not be enough to get a fuse lit to a bigger rally just yet. Most expect the USDA to cut demand for corn today…particularly with ethanol and exports, but others feel the big rebound in energy and thus ethanol production could keep the market supported. My hope is the weakness in the Dollar continues as it could be a real boost to exports and thus prices. While we know we have plenty of corn coming in the event this 2020 crop is solid…the hope is cheap prices are doing their job to cure cheap prices. Please let us know if there’s any way we can assist you…we’d be glad to help you get a plan in place.
Soybeans – Soybeans had a nice day. July beans settled 2 ¼ cents higher at $8.65 ½. The close was a 3 ¾ cents off the high and 2 ½ off the low of the day. The bean market has also been reluctant to see much buying. The funds have quietly built a small long position but given how much better the supply and demand balance sheet looks, it’s not hard to see why they’d want to get long. I have thought a June rally would be nice as my fear is bean acreage could grow a million acres or more. That wouldn’t drastically affect things, but it would throw more bushels into a balance sheet many of us have been hoping would get tighter instead of the opposite. As I said on Tuesday, we’re going to move forward with new-crop sales at $9…if it works for you, I’d consider placing an order. While I could see Nov beans rallying over that price, I wouldn’t get too greedy at the same time. As with corn, if you’d like help…and to learn a good plan for making incremental sales, let us know.
USDA Pre-Report Estimates:
USDA June crop supply/demand report estimates
USDA 2020-21 U.S. wheat production
USDA June | Average of | Range of | USDA | |
2020-21 | analysts’ | analysts’ | May | |
estimate | estimates | estimates | estimates | |
All wheat | _______ | 1.850 | 1.824-1.875 | 1.866 |
All winter | _______ | 1.238 | 1.211-1.264 | 1.255 |
Hard red winter | _______ | 0.718 | 0.680-0.738 | 0.733 |
Soft red winter | _______ | 0.297 | 0.284-0.305 | 0.298 |
White winter | _______ | 0.224 | 0.218-0.228 | 0.224 |
USDA 2019-20 U.S. grain and soybean ending stocks
USDA June | Average of | Range of | USDA May | |
2019-20 | analysts’ | analysts’ | 2019-20 | |
end-stocks | estimates | estimates | end-stocks | |
estimates | estimates | |||
Wheat | _______ | 0.979 | 0.968-0.998 | 0.978 |
Corn | _______ | 2.150 | 2.090-2.303 | 2.098 |
Soybeans | _______ | 0.577 | 0.497-0.630 | 0.580 |
USDA 2020-21 U.S. grain and soybean ending stocks
USDA June | Average of | Range of | USDA May | |
2020-21 | analysts’ | analysts’ | 2020-21 | |
end-stocks | estimates | estimates | end-stocks | |
estimates | estimates | |||
Wheat | _______ | 0.897 | 0.820-0.940 | 0.909 |
Corn | _______ | 3.360 | 2.897-3.595 | 3.318 |
Soybeans | _______ | 0.426 | 0.350-0.572 | 0.405 |
USDA 2019-20 world grain and soybean ending stocks
USDA June | Average of | Range of | USDA May | |
2019-20 | analysts’ | analysts’ | 2019-20 | |
end-stocks | estimates | estimates | end-stocks | |
estimates | estimates | |||
Wheat | ________ | 294.63 | 292.00-296.00 | 295.12 |
Corn | ________ | 314.31 | 310.00-319.70 | 314.73 |
Soybeans | ________ | 101.23 | 98.50-110.35 | 100.27 |
USDA 2020-21 world grain and soybean ending stocks
USDA June | Average of | Range of | USDA May | |
2020-21 | analysts’ | analysts’ | 2020-21 | |
end-stocks | estimates | estimates | end-stocks | |
estimates | estimates | |||
Wheat | ________ | 307.74 | 300.00-310.50 | 310.12 |
Corn | ________ | 339.78 | 335.00-346.60 | 339.62 |
Soybeans | ________ | 98.64 | 96.00-102.40 | 98.39 |
USDA 2019-20 South American corn and soy production
USDA June | Average of | Range of | USDA May | |
2019-20 | analysts’ | analysts’ | 2019-20 | |
estimate | estimates | estimates | estimate | |
ARGENTINA | ||||
Corn | ________ | 49.83 | 49.00-50.00 | 50.00 |
Soybeans | ________ | 50.64 | 50.00-51.20 | 51.00 |
BRAZIL | ||||
Corn | ________ | 99.42 | 96.50-102.00 | 101.00 |
Soybeans | ________ | 122.97 | 121.00-125.00 | 124.00 |
USDA world production
June USDA | May USDA | June USDA | May USDA | |
2019-20 | 2019-20 | 2020-21 | 2020-21 | |
estimate | estimate | estimate | estimate | |
Argentina wheat | _____ | 19.50 | _____ | 21.00 |
Australia wheat | _____ | 15.20 | _____ | 24.00 |
Canada wheat | _____ | 32.35 | _____ | 34.00 |
Russia wheat | _____ | 73.61 | _____ | 77.00 |
Argentina corn | _____ | 50.00 | _____ | 50.00 |
Brazil corn | _____ | 101.00 | _____ | 106.00 |
South Africa corn | _____ | 14.28 | ____ | 14.00 |
China corn | ______ | 260.77 | ______ | 260.00 |
Ukraine corn | _____ | 35.89 | _____ | 39.00 |
Argentina soy | _____ | 51.00 | _____ | 53.50 |
Brazil soy | ______ | 124.00 | ______ | 131.00 |
Call us if you want to talk positions or strategy…or simply bend our ear. If you want more information on the markets, be sure to visit my team’s website at https://www.agmarket.net/
Matt Bennett
217-273-1133 – Work
@chief321 – Twitter
matt@bennettconsulting.net – E-mail
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