June 4

Commentary

Overnight Markets:

Corn +2.25 = $4.406

Soybeans +3.25 = $10.440

Wheat +2.0 = $5.380

 

News Wire / Trade Talks:

-Trump to talk to Xi on the phone on Friday

-Iran supreme leader rejects US nuclear proposal, vows to keep enriching uranium

-Continued talk that a larger corn crop in Brazil will compete with US corn for export demand in the near future

-Russia drops export duty on wheat by 25% -Ag Ministry

-Trade talk that packers might be closing a cattle packing plant send our futures market lower on Tuesday. I can’t confirm this rumor.

-Weather Update:

 

 

 

 

 

 

 

Commentary:

Grains are trading higher this morning.  News is very quiet.  NOAA does predict heat to come back to the northern Midwest in the 8-14 day forecast. 

 

The corn planting pace is still above normal but with a wet forecast this week the 6.67 million acres of corn left to be planted might have a tough time getting in the ground. 

 

This might not be much of a story in the end, but could give the corn market some much needed support this week.  We average 4.5 million acres of corn prevent plant annually.  I think USDA used that number when calculating the March 31st initial planting estimate of 95.3 million acres.  The corn crop conditions rating is the second lowest in 6 years.  That should move the market more than the acres that are left to be planted.  However, I’ll be the first to say that the conditions ratings are going to improve in coming weeks with heat and sunshine. 

 

Spring wheat crop ratings are the 2nd lowest in 37 years.  But we sold off on Tuesday due to the fact that conditions improved in Monday afternoon’s report.  Like with corn, I believe the spring wheat crop conditions will continue to improve.  This could keep pressure on the market early each week.  Dry conditions in Canada could help support the market. 

The cattle market made yet another key reversal on Tuesday.  There was a rumor that a packing plant was either being closed or hours reduced.  I can’t find any actual facts on this story.  I don’t even know if a packing plant closing would be that bearish for the market.  It would cause futures to drop for a day or two but with packer profits in the red, I look for them to start closing older smaller plants that are inefficient.  The cattle will be moved to different locations to be processed.  It looked like Aug fats were going to make a run at taking out the key reversal from May 14th, but the change in direction into the close made another key reversal.  Fundamentals remain VERY bullish.  The question will continue to remain, how high can prices go without demand being rationed.  Plus, negative headlines are always a threat. 

 

No trade recs today.  Holding long wheat and corn outright positions along with the July/Dec corn spread which continues to not work.  We don’t have much time left for this spread to come around.  I need basis to improve quickly to help support this spread.  I don’t want to be in this spread the week July options expire. 

Posted on Jun 04 at 05:58