- Chicago new crop corn/soybeans fall to fresh contract lows; Rains from the remains of Beryl to aid E Midwest; French wheat yields disappointing.
- Chicago futures are sharply lower at midday with new crop corn and soybean futures scoring new contract lows. December corn fell to $4.08 while November soybeans declined to $10.9425 amid improving Eastern Midwest weather tied to the remains of hurricane Beryl. Moreover, the Monday following the July 4 holiday week always produces big price moves, and today’s drop falls into that category, in a big bearish way. Wheat futures have been a follower of the summer row crop decline and are back testing the lows following the June Stocks/Seeding Report. Managed money has been sizeable sellers this morning as they add to already large net short positions. We look for Chicago to form a low early this week with a recovery into Thursday’s Brazilian CONAB and Friday’s USDA July Crop report. The momentum in the market is down and the algo systems are trading accordingly on the short side of the marketplace.
- Chicago brokers estimate that the managed money has sold 12,400 contracts of corn, 8,700 contracts of soybeans, and 5,900 contracts of wheat. In the products, the funds have sold 5,100 contracts of soyoil and 6,500 contracts of soymeal. The fund selling slowed at midday but may return prior to the close. The market has an exceptionally bearish feel all morning long.
The USDA reported the sale of 135,636 mt of US corn for delivery to an unknown destination. Of the total, 50,800 mt were for delivery during the 2023/24 marketing year and 84,836 mt for 2024/25.
- US weekly export inspections for the week ending July 4 were; 40.3 million bu of corn, 10.0 million bu of soybeans, and 12.5 million bu of wheat. For their respective crop years, the US has shipped out 1,713 million bu of corn (up 393 million or 30%), 63.6 million bu of wheat (up 7.7 million or 14%), and 1,536 million bu of soybeans (down 291 million or 19%). The US is on track to export 2,150 million bu of corn and 1,675 million bu of soybeans.
- French harvested wheat yield data continues to show a sharp drop in production potential with some traders discussing a crop of 25-26 million mt. The decline is based on the 8% drop in seeding and the season long cool/wet weather that hindered seed development and is starting to produce crop quality issues. A 25-26 million mt French crop will drag total EU wheat production down to 126 million mt or less. And a big unknown is the milling characteristics of the French harvest amid reports that grains are already germinating. Paris wheat futures have fallen with the Chicago decline in a test of the €220 support area. French wheat values are priced $30/mt above the Russian fob market. Why Russia keeps lowering its wheat price offers is being questioned as Russian farmers will not be in a hurry to sell wheat off the combined at breakeven or lower prices and poor yields, that reflect the ongoing drought. We see the world wheat market as “cheap” relative to prevailing fundamentals.
- The midday GFS weather forecast is like the overnight solution with the remains of Beryl taking a track from far NE Texas into Michigan with rain in the narrow 200-mile pathway equalling 0.75-3.00”. The positioning of the storm is slightly further north. Following the storm, the overall Midwest goes dry for the next 6-10 days. Heat is initially absent, but it returns with vigour beyond July 16. The western ridge of high pressure progresses eastward and sets up across the Central US which will produce above to much above temperatures with highs in the upper 80’s to the upper 90’s and even a few locations that will exceed 100 degrees. The coming hot/dry weather will initially be favoured by the NW Midwest, but the last half of July is forecast to be warmer/drier.
- US corn, soybean and spring wheat crop conditions are forecast to be steady to 1% better in the good/excellent category at 67% for corn/soy and 72% for spring wheat. The US winter wheat harvest is forecast to be 68% completed. The coming Beryl rains will help ease dryness across the E Midwest, but a lasting period of cool/wet weather is not offered. As the jet stream pushes north, an extended period of Central US heat/dryness is forecast during the last half of July.