• It has been a mixed but mostly lower session in Chicago. Monday’s largely unexpected drop in corn ratings has triggered modest fund short covering. We estimate that managed funds this morning were short a net 295,000 contracts of Chicago corn, little changed from Tuesday and still just shy of the all-time record. Long wheat-short corn spreads are also being liquidated. This has been the defining feature of trade so far and no major changes are anticipated into the close.

• Dry weather into late week across the Southern and Central Plains will keep the pace of winter wheat harvest there accelerated. Protein levels have been disappointing thus far, and the trade awaits lab results from eastern CO and western KS, hoping quality improves. Generally, looming builds in spot supplies are weighing in global wheat markets, with Paris milling wheat settling €0.75/mt weaker. It is tough to rally wheat in late Jun/Jul without massive supply dislocation. Yield losses in Europe and Ukraine have been digested. A new supply catalyst is needed to counter seasonal harvest pressure.

• The Australian weather forecast maintains a pattern of near normal rainfall in both the east and west into late June. Recall the Australian Bureau of Meteorology in early June projected wetter than normal conditions throughout summer. IRI on Monday followed with a similar outlook. New crop Australian supplies are still months away, but a major rebound in exports is more probable in 2020 than in recent years.

• We mentioned this morning that the Russian government opted not to place a quota on wheat exports between now and December. The arrival of Australian supply in Dec/Jan may reduce the burden of strict Russian wheat export controls thereafter. Work continues to suggest that Southern Hemisphere weather in Sep is key to long term wheat valuation.

• Spot crude is up another $0.15/barrel at $37.30. RBOB gasoline futures are up $.02/gallon, basis spot, and have risen above ethanol for the first time since the early part of March.

• Futures-based ethanol production margins have contracted in recent days but remain profitable. The EIA’s weekly energy report on Wednesday is expected to feature ethanol production through the week ending June 12 of 250-255 million gallons, vs. 245 million the previous week. Ethanol economics are improving, but as a reminder an average of 288 million gallons/week is needed to meet the USDA’s old crop corn industrial use forecast.

• The midday GFS weather forecast is drier next week across MO and IL but is wetter across the Southern Plains and Delta. The broad pattern remains consistent with prior runs as an important pattern shift looms. Light/moderate rain will begin to impact the E Plains, IA and MN on Thurs/Fri. Near daily showers will be featured across the Eastern Plains, Western Corn Belt and Delta thereafter into June 25. The greatest totals into late next week will favour the West and South, but the whole of the Central US will be blanketed by rainfall of at least 1″ in the next 10 days. Note that drought conditions across KS and OK will be eased considerably.

• Northern Hemisphere wheat harvest will make US/world wheat rallies laboured into July. Corn should reach its seasonal peak in the next few sessions as long as extended range forecasts maintain near normal precipitation into the opening days of July. The soy complex is still subject to Chinese demand.

• Dry weather throughout May has triggered a further downgrade in UK crop yields bu the EU’s crop monitoring service (MARS). The outcome is that wheat, winter and spring barley and rapeseed are all forecast below the five-year average with cereals around 1% lower and rapeseed some 3.8% down. Early June rain was seen as beneficial in northern regions but still not sufficient to reverse the downgrades and the south and eastern areas are particularly of concern. Continued rains through June have been beneficial but have been somewhat isolated, localised and variable. UK wheat and rapeseed supplies for 2020/21 are seen as tightening and placing greater reliance upon imports.

• Chicago futures are red at midday with Minneapolis wheat holding near steady. It appears that Central US weather is directing price direction with needed rain to fall across the Midwest/Central Plains/Delta later this week (and into early July). An early sharp decline in the US stock market offered a bearish tailwind. But that changed at midday. As the US stock market has bounced near steady, it has offered a respite for the grains. We look for a mostly lower Chicago close with N American weather offering direction into the weekend.

• FAS announced the sale of 390,000 mt of US soybeans to China for the 2020/21 crop year. The sales were reported to made late last week. We calculate that China has now taken 4.5 million mt of US soybeans including half of what the US has sold to unknown destinations.

• Chicago brokers estimate that funds have sold 3,200 contracts of corn, 2,700 contracts of soybeans, and 1,900 contracts of wheat. In soy products, funds have sold 2,000 contracts of soymeal while buying 1,800 contracts of soyoil. We note that corn has pushed below last week’s low at $3.40.

• US weekly export inspections for the week ending June 11 were; 3 5. 8 million bu of corn, 13.8 million bu of soybeans, and 16.3 million bu of wheat. The soybean and wheat export numbers were on the lower end of trade expectations.

• For their respective crop years to date, the US has shipped out 24 million bu of wheat (down 6 million or 19%), 1,203 million bu of corn (down 405 million or 25%), and 1,326 million bu of soybeans (down 17 million or 2%). China shipped out just 1.8 million bu of US soybeans last week. Brazil last week exported 3.5 million mt of soybeans or a record for the week at 128 million bu. The Brazilian soybean export pace continues to be huge. This will maintain a slower than desired US soybean export pace into August.

• The European weather model will be updated with a new version due on July 1 to improve its forecasting ability. It has been years since a new version of the Euro weather model has been available. We note that the new prototype of the model is running, and it has more rain for the Midwest than the current European weather model forecast.

• NOPA estimated its May soybean crush rate at 169.5 million bu which fell below trade expectations on slowing domestic meal demand. In April, NOPA crushed 171 million bu with last year’s total at 154.8 million bu. They had anticipated that NOPA would release a crush estimate of 173 million bu. Soyoil stocks fell to 1,880 million pounds vs expectations of 2,065 million pounds, which was deemed as bullish.

• The Brazilian Real has fallen to sharp losses at 5.20:1 based on the expectation that the Brazil Central Bank will cut its lending rate by another 0.75% to a record low 2.25% this week. A year ago, this lending rate was over 12% suggesting that there is little return to investors amid the high stakes of the Brazilian economy with a worsening Covid-19 infection rate.

• The midday GFS weather model is staying with a wet/coolish pattern for the Central US with any high pressure ridging over the NW US in into the closing days of June. This creates a NW upper air flow with a strong NW flowing Jet Stream producing showers/storms on a regular basis. Midwest 10 day rainfall totals are forecast to range from 1-3.” with coverage estimated at 75-80%. There is no sign of pattern stagnation or lasting extreme heat. The Plains will stay hot this week before moderation on the weekend. The forecast aids crops.

• Chicago values will watch Midwest weather with improved rain/seasonal temperatures forecast for the Midwest into the end of June. This will cap any bounce with a close below $3.39 Dec corn turning trends downward again.

To download our weekly update as a PDF file please click on the link below:

Weekend summary 12 June 2020

• The USDA announced the sale of 720,000 mt of US soybeans to China. 657,000 mt was sold for new crop with 63,000 mt for 2019/20. Today’s purchase takes China’s new crop soybean purchases to 3 million mt.

• US Weekly Export Sales were; 9.9 million bu of wheat, 26.0 million bu of corn and 36.9 million bu of soybeans. US weekly soybean sales were larger than expected.

• For their respective crop years to date, the US has sold 214.2 million bu of wheat (down 5% or 12 million), 1,619 million bu of corn (down 286 million or 15%), and 1,604 million bu of soybeans (down 119 million or 7%).

• The June USDA Crop report was modestly bearish with 2019/20 corn and soybean end stocks rising slightly. Traders had expected demand cuts in 2019/20 US corn ethanol grind and US soybean exports, so the stocks increase did not trigger any market impact. It is Central US weather and yield expectations that will direct Chicago values into the June Stocks/Seeding report on the 30th. The US 2020 wheat crop was slightly larger, but US 2020/21 stocks are forecast at a 6-year low. The downside wheat potential is limited below $4.45 July KC futures.

• WASDE reduced 2019 US corn production by 45 million bu (Upper Midwest/N Dakota) which was largely balanced by a 50 million bu drop in US 2019/20 US corn ethanol grind. We look for another 100-150 million bu cut in US corn ethanol demand in coming reports as USDA takes an approach of cutting demand each month as weekly EIA data indicates. WASDE forecast 2019/20 US corn end stocks at 2,103 million bu with 2020/21 corn end stocks also raised by 5 million bu to 3,323 million. The new crop US corn end stocks estimate is the largest in 33 years and considered bearish if 2020 corn yield is trend line or above at 178.5 bushels/acre.

• The USDA left 2020 Brazilian corn production estimate at 101 million mt with Argentina at 50 million mt. The 2020 Ukraine corn crop was forecast at a record large 39.0 million mt. World 2020/21 corn supplies were projected at a record large 1,188 million mt, with new crop end stocks pegged down 2 million at 338 million mt. This compares to old crop world corn stocks at 313 million mt (gain of 25 million).

• WASDE raised 2019/20 US soybean end stocks 5 million bu to 585 million bu to account for reduced exports (down 25 million to 1,650 million bu), increased crush to 2,140 million bu (up 15 million) and a 5 million bu reduction in the 2019 North Dakota soybean crop of 5 million bu. A further cut in US soybean exports is forecast.

• In world soy production, WASDE left 2020 Brazilian soybean production at 124 million mt and Argentina at 50 million mt. It appears unlikely that either crop will be adjusted one way or the other at this late date. Brazilian soybean exports were raised to a record large 85 million mt with Argentina at 9. million mt.

• NASS raised US winter wheat production 11 million bu to 1,266 million via modest yield boosts in KS, CO, ID, IL, IN and Ml. HRW production is pegged at 743 million bu, vs. 733 million in May. SRW production is pegged at 297 million, vs. 298 million in May and vs. 239 million a year ago. The boost in HRW yields is a bit surprising but we note that the trade often underestimates production in June.

• US wheat end stocks were lifted 16 million bu to 925 million due to larger production and a modest increase in new crop carryin. As expected, old crop US wheat exports were reduced 15 million bu to 965 million.

• 2020 world wheat end stocks were raised to a new all-time record 316 million mt. World stocks less China are estimated at 154 million mt, vs. 150 in May and up 9 million from 2019/20. Combined EU and Ukrainian production was lowered 3.5 million mt from May. Russian production was left unchanged at 77. The Aussie crop was boosted 2 million mt to 26 following ABARES update this week. The major exporter wheat balance tightened slightly amid reduced production and a slight boost to projected world trade in 2020. We maintain that while near-term shortages will be avoided, Black Sea spring wheat weather needs close monitoring.

• The USDA’s June WASDE is rarely market-moving and aside from higher than expected wheat production, today’s report proved no different. It is back to watching US and Black Sea climate forecasts. The midday GFS weather forecast continues to hint at the return of Midwest precipitation beyond June 21. Whether this shift occurs will be key to mid-summer price direction.

• Red has been the colour of the morning with Chicago corn, soybean and wheat futures lower at midday. The macro financial markets have a bearish feel with US equity and crude oil prices sliding while the US$ has rallied against the Ruble/Argy Peso. The greenback is stable vs. Brazilian Real at 4.90:1. The Argentine Peso has scored a new record low of 69.1 vs the US$.

• Corn has been the downside leader on a larger than expected CONAB Brazilian corn crop estimate and historically high NASS US corn/soybean crop ratings. Amid adequate to surplus soil moisture across the Midwest/Delta and the remains of Cristobal laying down needed rain, the selling pressure has been widespread, but the near record fund short position lurks in the background.

• Uncertainty on the long-range summer Central US forecast prevails. Traders do not want to be too strong in their bearish stance amid managed money that is already short. And China is said to have secured several new crop US soybean cargoes on the morning break. The uncertainty over the summer N American weather pattern will provide levity until a wetter Midwest forecast is offered.

• Chicago brokers estimate that funds have sold 4,600 contracts of wheat, 4,200 contracts of corn, and 3,100 contracts of soybeans. In the products, funds have sold 1,200 contracts of soymeal while buying 2,100 contracts of soyoil.

• There was no USDA/FAS daily sales announced this morning. World importers see no reason to chase a Chicago rally at this early stage of the 2020 growing season.

• Brazil’s CONAB (USDA equivalent) pegged the 2020 soybean crop at 120.4 million mt (vs 120.3 million mt in May) with the corn crop at 101.0 million mt (vs 102.3 million in May). There is seasonal tendency for CONAB to raise the Brazilian corn crop as the winter corn harvest starts and yields are better than expected. We would expect this trend to be followed again in 2020. The USDA has Brazil’s soybean crop at 124 million mt vs the 120.4 million mt from CONAB, it will be interesting to monitor if USDA makes any adjustment to Brazil’s soy crop on Thursday.

• After 3 years of dire drought, Australia’s wheat production is forecast to rise a sharp 76% to 26.7 million mt based on a 27% expansion in seeding and an abundance of soil moisture. Total Australian winter grain production is forecast to increase to 44.5 million mt, some 11% above the 10-year average. Australian weather must be monitored, but rainfall is forecast to be near to above average over the next 3 months. Even Australian 2020 canola production is forecast to expand by 40% to 3.2 million mt. The abundance of grain looks to place Australia back as a major world grain exporter starting in mid-October/early November which is likely to cause world wheat prices to peak in December.

• Since we are discussing world crops, we would note that as the Argentine summer row crop harvest is pushing strongly ahead, the 25-40 days of acute dryness is promoting worry for winter wheat. Farmers are holding back on wheat seeding with soils reported to be “powder dry”.  The forecast is arid for Argentine wheat for another 10-14 days, which is promoting a real worry.

• The midday GFS US weather forecast is consistent with the overnight run that any rain that falls across the N Plains and the Midwest will drop in the next 36 hours with the remains of Cristobal passing into Canada. This system is positioned across IA with its rain extending into IL. Additional rainfall will range from 0.25-1.50″ with locally heavier amounts. The storm exits through Manitoba on Wednesday Thereafter, mostly dry/mild weather occurs with warming developing after June 17. There is not another good chance of rain until June 23rd, a rather dry period lies ahead.

• It is all about the summer weather pattern for N America and the return of rain. No extreme heat is noted, but few traders want to sell the break until the Central US weather forecast is wetter. KC wheat looks to be forming a bottom near $4.50 July.

• It has been a mixed morning with back-and-forth type of Chicago trade. Soybean and wheat futures are sagging while corn tries to hold in the green at midday.

• The volume of trade has declined from a rather active morning with fund managers noted covering some of their net short corn position. We look for a mixed close, with Chicago traders waiting for direction of the Central US weather before deciding on new sales/purchases. It is Midwest weather that is the most important ingredient for Chicago futures heading into late June.

• Chicago brokers estimate that funds have bought 4,300 contracts of corn while selling 2,200 contracts of soybeans and 1,900 contracts of wheat. In soy products, funds are flat soymeal while buying 3,100 contracts of soyoil.

• The USDA reported no new sales of US corn, wheat or soy this morning. There is talk that China is again asking for October/November soybean offers, but no new sales can be confirmed. China’s buying decisions has been shifted to their Ministry of Agriculture and away from China’s Commerce Department.

• FGIS/USDA reported that for the week ending June 4, the US exported 43.3 million bu of corn, 7.8 million bu of soybeans, and 15.9 million bu of wheat. The soybean and wheat export totals were below trade expectations.

• For their respective crop years to date, the US has exported 1,165 million bu of corn (down 416 million or 26%), 1,308 million bu of soybeans (up 24 million or 2%), and 6.2 million bu of wheat (down 11.1 million). It is far too early to place a percentage gain or loss to date for US wheat sales in the first week of 2020/21.

• Brazil has now harvested 2% of their winter corn crop and yields are better than expected. Mato Grosso is reporting record yields while Parana cutting has just started. The yield losses in Parana were forecast to be down 25-35% and the yields are coming in with losses of 10-20%. It is too early to adjust Brazilian corn production up or down, but so far, yields are encouraging. Brazil will become a more aggressive corn exporter when harvest surpasses 40%.

• CONAB will be out Tuesday morning with the Brazilian soybean/com estimates with ABARES out Wednesday with estimated Australian wheat production. The USDA will update the world on Thursday with their June Crop Report.

• Russian FOB wheat offers keep rising after gaining $8/mt last week. July/Aug FOB Russian wheat is offered at $210/mt with bids at $207/mt. Hot/dry conditions for Southern Russia and Kazakhstan are trimming wheat production estimates. Rains will be needed next week to keep Russia’s wheat production above 75.0 million mt.

• The midday US GFS weather forecast is consistent with the overnight run that largely dry/cool Weather will be following Tropical Storm Cristobal for 5-7 days. Cristobal is located over N Louisiana and is trekking north/northwest. The storm will follow the western spine of the Mississippi River northward before nudging east in NE IL and passing over WI. Rain totals are estimated in a range of 0.5-2.50″. Illinois looks to miss any heavy rains which will aid their drying process. No extreme Midwest heat is forecast with temperatures ranging from the 70′s to the upper 80′s. The extreme heat in the Plains will also be ending on the weekend. The flow of Gulf moisture needs to return for heavy Midwest rains to redevelop. The N Plains/Upper Midwest will be well watered, it is the C Plains and the E Midwest that must be monitored.

• For now, the mild/sunny/dry weather is aiding Central US crops amid adequate to surplus soil moisture. We look for corn/soy crop ratings to nudge upwards with spring wheat holding steady this afternoon. Rain is needed in the last half of June to replenish lost topsoil moisture prior to reproduction. All eyes are long range weather forecasts.

To download our weekly update as a PDF file please click on the link below:

Weekend summary 5 June 2020

• Chicago wheat/soybean futures have rallied to sharp gains with corn being pulled along at midday. The €uro currency rally occurred as their Central Bank left interest rates at 0% but promised to be a huge buyer of another $600 billion €uros ($672 million dollars) through their Pandemic Emergency Purchase Program (PEPP). The PEPP news pressured the US$.

• Research notes that the ag currencies, such as the Russian Ruble, the Brazilian Real and Argentine Peso are weaker at midday. US$ index selling is pressured largely by the stronger €uro. In fact, the Argentine Peso scored a record low vs the US greenback at 69:1.

• The morning fund short covering has pushed corn back to last week’s high while soybeans/wheat near upside price targets. July KC wheat’s 50 day moving average crosses at $4.745, which is being tested. With a harvest weekend ahead, we doubt that KC wheat futures will be able to rise too much more. Wheat unlike corn or soybeans is likely to see a smaller harvest amid the recent heat/dryness across portions of the Central Plains. This is no place to chase a Chicago rally, but it is always difficult to measure when the fund short covering will be completed.

• The US homestay grains of oats/rice have enjoyed a strong rally amid expanding domestic consumption. Oat milk and rice are the new staples for home chefs which has fuelled demand. Unfortunately, the homestay has not expanded US #2 yellow corn or soybean domestic use. In the case of corn, homestay has lowered domestic demand via ethanol grind reductions. WASDE is likely to cut US ethanol on Thursday by another 50-100 million bu due to the lower May grind.

• US farmers have been good sellers of old crop soybeans/corn this morning with merchandisers reporting that sales are the best in weeks. Cash sales are likely to persist with July soybeans holding an upside price target of $8.80 and July corn at $3.30-3.34.

• US export sales for the week ending May 28 were; 22.7 million bu of wheat (both crop years combined), 25.1 million bu of corn, and 18.2 million bu of soybeans. China showed up as taking soybeans and wheat (the wheat purchase was a switch from an unknown destination). The US weekly corn sales total was disappointing.

• For their respective crop years to date, the US has sold 990 million bu of wheat (up 41 million or 4%), 1,593 million bu of corn (down 306 million or 16%) and 1,567 million bu of soybeans (down 148 million or 9%).

• Chicago brokers estimate that funds have bought; 14.400 contracts of corn, 9,100 contracts of wheat, and 9,400 contracts of soybeans. In the products, funds have bought 5,400 contracts of meal while being flat soyoil.

• The US midday weather forecast is consistent with the overnight run. Gulf activity will produce showers/storms across the Delta with Midwest totals ranging from 0.5-2.50″ over the next 10 days. Warm temperatures prevail for another 5 days before much cooler temperatures flow southward. The sunshine and cooler temperatures will be ideal for Midwest row crops that have been warm/wet this week. There is no indication of a drought pattern and US crop conditions are likely to improve further on Monday.

• The Chicago rally is all about “market make-up” with funds heavily short corn/soymeal. Funds are likely to enter a modest long in wheat/soybeans before seasonal highs are confirmed next week. We look for US corn and soybean good/excellent ratings to rise another 1-2% on Monday.

• Rising Russian fob wheat and a sharply higher Brazilian Real are two Chicago fundamental price drivers this morning. Funds have been modest buyers of the rally with US farmers starting to increase their sale of old crop corn stocks. With an estimated 50% of the US corn crop to be pollinating by July 14, the time window for a new crop weather problem is shrinking. Chicago corn prices were weaker early and rallied back to unchanged following the gains in soy/wheat.

• We look for a mixed Chicago close. Doubt exists that the Brazilian Real can fall too far below 5:1 US$ as the break seems to be largely technical of out of positioned Brazilian Real shorts. The Brazilian economy is a mess and a rise back near 6:1 could easily develop by September. This is no place to turn bullish the Brazilian Real.

• The USDA announced another 186,000 mt of US soybeans to China with 66,000 mt being old and the remainder being new crop. China appears to be back securing 1-5 cargoes of US soybeans daily. We note that Trump Administration blocked Chinese airlines flying to the US after June 16 in a political tit-for-tat. China blocked US carriers from flying into China last week and the US is just counter punching China’s actions. The move is likely to further inflame political tensions between the US/China.

• The Russian July fob wheat price has moved up to $207/mt amid the coming difficult transition between and an old crop quota and a new crop sales system that is more state controlled. Russian farmers will be more interested in selling into the higher priced domestic market, than for export. Research looks for Russian fob wheat prices to rise into July, with their seasonal price break being delayed this year to August/September. US weekly ethanol production expanded with American’s slowly driving more miles.

• US weekly production rose to 225 million gallons vs 213 last week. 27% of the US ethanol industry remains shut down. This week’s production total is well below the USDA forecast, and cut is expected from WASDE in their June report next week.

• Chicago traders estimate that funds have bought 2,400 contracts of wheat, 3,200 contracts of soybeans and 2,600 contracts of soymeal. Funds have sold 3,200 contracts of soyoil and 900 contracts of corn. Chicago corn open interest has been rising each of the past 13 trading sessions. We hear that this rise is related to funds taking a larger net short position through swap transactions.

• The US midday weather forecast is slightly drier across IA and the Central Plains, but wetter for IL/IN as the remains of a tropical storm turn eastward more quickly. 10-day Midwest rainfall totals will range from 0.75-3.00″ with coverage pegged at 85%. The overall pattern is progress with no indication of a blocking high pressure ridge. The forecast is favourable for Central US row crops.

• Rising Russian wheat prices and a declining US HRW wheat crop are offering support to US wheat futures. However, the soybean rally is largely based on the sharp drop in the Brazilian currency, the Real, to 5:1 vs the US$. We doubt that the Real decline will continue and Nov soybeans above $8.75 appear overvalued.

• Soybeans are higher, wheat is lower with corn caught in-between in midday Chicago trade. Favourable world weather is pressuring wheat values while soybean futures are reacting to China’s return as a US soybean purchaser/importer. We look for a mixed Chicago close with November soybean futures running into resistance above $8.70 while July KC wheat uncovers support below $4.50. Chicago lacks direction for now, but in the coming days, the seasonal price trends will turn down for the entire Chicago complex. It is difficult to bull a Chicago market beyond mid-June without a summer Central US weather problem.

• China’s USDA confirmed purchase of US soybeans overnight has calmed nerves regarding US Farm Goods retaliation for Friday’s US Hong Kong sanctions. Cash connected Gulf traders report that China is back bidding for US soybeans in a new crop position. USDA confirmed that China booked 2 cargoes or 132,000 mt for 2020/21. The China buying confirmation has produced a short covering Chicago soybean rally with July futures posting double digit gains. The US/China appear to have avoided any political spill-over to the Phase One Trade Deal which is a positive development for US agriculture.

• China is asking for US new crop soybean bids, a welcome sign. China and the US continue to work through trade pact implementation, but the Phase One Trade Deal has withstood some harsh politics from both sides without bending in the past few weeks. US Senator Grassley says he is not worried about China adhering to their Phase One Commitment. That said, cash traders report that China remains highly selective in their US purchases and won’t chase rallies.

• Questions arise as to whether WASDE will raise their US corn yield estimate above trend (178.5 bushels/acre) in the June WASDE report. WASDE has shown flexibility in raising or lowering yield in June to account for weather and seeding dates. WASDE typically waits until July to make any adjustment in their soy yield. The point is that the 2020 US corn crop is off to a favourable start and condition ratings are likely to rise further amid the coming mix of weather in coming weeks. US corn crop conditions are likely to show further gains.

• GASC secured 2 cargoes of Ukraine wheat at $210/mt with freight costs amounting to just over $10/mt for a landed price of $220.40-220.90. It is not surprising that the Ukraine will be the early world wheat seller to GASC with interior Russian wheat prices above the export market. The initial Russian wheat harvest should flow to domestic millers with Russia becoming more active in world trade in August/September.

• The value of the US$ has been hurt in recent weeks against the Brazilian Real, Russian Ruble or the €uro, but not the Argentine Peso. The decline in the US$ would have been important had it occurred prior to Northern Hemisphere seeding. Today, Argentine corn is offered $0.30/bu under the US Gulf with Russian wheat being $0.54/bu cheaper. Yet, the weaker US$ could start to slow S American ag expansion in 2021.

• Chicago traders estimate that funds have bought 3,000 contracts of corn and 4,600 contracts of soybeans, while buying 2,900 contracts of wheat.

• The midday US weather forecast shows no sign of a Midwest blocking high pressure ridge with near to above normal rainfall for the next 2 weeks. Midwest high temperatures in the 80′s to lower 90′s will prevail for the next 5 days with cooling temperatures after June 8. A low pressure trough will sag southward during the 10-15 day period. The forecast is favourable for Central US row crops.

• If a Midwest weather problem does not surface by mid-June, Chicago summer row crop prices will turn down (again) led by corn. The Chicago corn market has been consolidating for over a month. The urban unrest is again cutting into fuel demand while US corn/wheat export demand is slowing. We would sell a significant corn rally as any above trend yield will only add to the 4 billion bu end stock total.