- Ag markets are mixed but very little changed at midday. The market is unwilling to put on new positions ahead of Friday’s Stocks and Seedings data. We do not expect any real statistical fireworks tomorrow morning. How Sep-May corn/bean residual use compares to the USDA’s annual forecasts will be most interesting. As for acreage, we didn’t see much need/incentive for major shifts during the spring. We look for acreage to change by 200-500,000, a rounding error. Otherwise, crude has shrugged off early losses and has found yet newer rally highs. US crude export demand is impressive (a record last week), and further declines in stocks are due through the balance of summer. Ethanol futures have followed. The US$ is marginally weaker, major exporting currencies are steady to higher. Weekly US export sales were generally in line with expectations, if a bit better in corn. Through the week ending June 21, US exporters sold a net 33 million bu of corn, vs. 7 million the week prior; 13 million bu of soybeans, vs. 11 million the week before; and 21 million bu of wheat, vs. 17 million. Meal sales totalled a respectable 146,000 mt, up 30,000 from the previous week.
- The US’s July 6 tariff deadline is just a week in the offing. The immediate 25% premium placed on US beans will trigger more pronounced cancellations. The US’s tone towards China appears to have softened as the administration doesn’t aim to target Chinese investment in US commodities. China today says it is planning to lift its cap on foreign investments in a host of sectors. More clarity is no doubt needed prior to next Friday. Actually solving US-Chinese trade issues will be a longer term phenomenon.
- The GFS’s midday weather forecast run again fails to feature any meaningful pattern shift in the Black Sea. Western Ukraine and far northern corn areas in Russia will benefit from near term rainfall. Expansive dryness resumes across the Black Sea grain belt late next week. The region’s primary corn belt will remain arid and rather warm through the first half of July.
- The central US midday GFS weather forecast is slightly cooler and wetter in the 11-15 day period, as it is committed to shifting the mean position of high pressure aloft westward beyond the next 9-10 days. Recall the EU model this morning kept the ridge a bit more centrally located. This will be a crucial battle between the models, particularly in next week’s runs. Expansive ridging in the near term will limit rainfall to northern and eastern growing areas. High temperatures in the low/mid-90s will be common across the Midwest. Highs in the 100s will impact the S and C Plains throughout the next 10-12 days. Note also that overnight lows next week will range in the low/mid-70s. This will continue to accelerate crop growth. The GFS forecast breaks the ridge pattern with a cool front July 9-11. Near normal temperatures and scattered showers will return by mid-July if correct.
- It is a pre-USDA positioning day. We would choose to stay out of the market amid elevated trade and weather risks. Extreme heat in early July and simultaneously the possibility of US tariffs placed on China will boost volatility.