- Markets are higher at midday, with soybeans leading the way. It’s partially a sell the rumor buy the fact mentality. But also of note is the widening of US soybeans and product discounts to all other origins. This morning Gulf beans were offered at an incredible $58/mt discount to Brazilian origin for August delivery. Spot soybean rest at a $75/mt discount to canola (rapeseed), and Black Sea sunflower prices hold a rare premium to US beans. The market has accomplished the first part of its goals, and this should give the bears pause moving forward. Crude has recovered from overnight losses, with spot WTI up $.90/barrel at $73.90. The Dow is up 145 points. Official US grain/soy exports in May were better than expected, and the break has no doubt offset China’s lack of interest in US beans. Census soybean shipments in May totaled 110 million bu, more than double May of last year. May- June soy shipments combined will be a record 224 million bu, vs. 119 million a year ago. The USDA’s target will be easily hit, if not exceeded. Official US corn exports in May were 310 million bu, a record for any month.
- Crush margins have surged (to $2.00/bu, basis futures). USDA is expected to raise crush further in its July or August WASDEs. The CFTC’s report will be delayed until Monday. Fund as of Tuesday cut their net wheat position slightly, but added to shorts in corn and beans.
- The midday GFS weather forecast is favourably wetter in Central Europe in the 11-15 day period, but maintains dryness and above normal temperatures across a bulk of the Black Sea corn and oilseed belt. A rather hot 6-8 days lies ahead for the Black Sea as well, with high temperatures this weekend and early next week to reach into the low 100s. New crop Black Sea corn is offered at $.85/bu over futures, vs. $.70/bu at the Gulf.
- The central US Midday GFS weather forecast is again drier in the extended period as the mean position of the jet stream stays north of major growing areas. The GFS forecast does allow temperatures to moderate across the Midwest beyond July 15, but very little rain is expected into the latter part of July. Also, the EU solution this morning was much warmer than the GFS. An expansive high pressure ridge will dominate the N American weather pattern for 10-12 days. Its influence will at times wane, but no model eliminates high pressure altogether into July 22. Temperatures in the upper 90s/low 100s will be common across the Plains through the period.
- Markets today are reacting to weather, and initial tariff consequences have been digested. It remains that negotiations are required for any lasting rally. Much closer attention will be paid to US weather through corn pollination. In normal years, substantial premium would be added given the lack of rain and periodic heat.