- Choppy with little direction are Chicago values at midday. The elevated prospect of rain for the Plains/Midwest over the next 2 weeks is capping rallies while the uncertainty of the July weather pattern and future US export demand (China) is underpinning breaks. Heading into the weekend, we doubt that the bulls/bears will be able to get a leg up on the other. A mixed to slightly higher close is forecast as wheat tries to forge a seasonal bottom while traders debate the US July weather pattern and 2020 US corn/soybean yields.
- FAS/USDA did not announce any new export sales today. It was rumoured that China secured 2-5 cargoes of US soybeans yesterday, but that buying was not confirmed/or individual exporters did not sell more than 100,000 mt.
- NOAA came out with the monthly weather forecast calling for near to above normal temperatures and near to above normal rainfall. A wet and warm weather pattern during July would prove favourable to 2020 US corn/soybean yield prospects. If the coming wet weather forecasts prove correct, it is temperature that will be the most important driver of yield during corn pollination.
- Chicago traders estimate that funds have bought 3,200 contracts of corn and 1,300 contracts of soymeal, while selling 2,100 contracts of wheat, 2,400 contracts of soyoil and 700 contracts of soybeans. Funds appear to be lacking passion as they edge into larger net short wheat and soymeal positions.
- The USDA Export Sales Report for the week ending June 11 showed net sales of 18.5 million bu of wheat, 14.1 million bu of corn, and 19.8 million bu of soybeans. The corn/soybean sales were for old crop. The US sold 50.8 million bu of US new crop soybeans which were mostly for China, while new crop US corn sales were pitiful at just 4.5 million bu.
- For their respective crop years to date; the US has sold 233 million bu of wheat (equal to last year), 1,633 million bu of corn (down 274 million or 15%), and 1,624 million bu of soybeans (down 118 million or 6%). The soybean sales pace remains disappointing with WASDE to trim its old crop export estimate by another 25 million bu in the July WASDE.
- We continue to hear exporter discussions that China is seeking offers for US soybeans, ethanol and HRW wheat. No new sales have taken place and China will be preparing for the weekend on Friday.
- Egypt’s GASC secured 240,000 mt of July/August wheat with 120,000 mt coming from Russia and 60,000 mt each from Ukraine and Romania. The fob price we hear is pegged at $207/mt.
- A favourable progressive weather pattern will be maintained across North America over the next 2 weeks (ending July 4). This will provide a favourable mixture of rain, sunshine and cool temperatures. The midday rainfall forecast is wetter for the E Midwest which raises confidence in amounts/locations. The 10-day GFS rainfall forecast map offers 1.50-3.50″ of rain with the heaviest totals falling in the E Plains. The E Midwest will receive 10-day rainfall totals of 0.75-2.50″, but the coverage of the rain will be 70%. High temperatures will retreat to seasonal 70′s to 80′s starting on the weekend. The coming rain and cooler temperatures will be favourable for Central US crops.
- Uncertainty and nervousness about the July weather pattern is keeping Chicago prices in a range. The discount of S American corn vs the US Gulf is slowing US corn export demand. Seasonally, the Gulf corn basis peaks in July as farmers shed old crop cash length. Soy futures have a bid of China under the marketplace.