- 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.