- Mixed/low volume is prevalent in Chicago trade at midday with corn the downside leader while the soybean/wheat markets trade either side of unchanged. Traders are looking for a decline in US corn/soy and spring wheat crop conditions this afternoon. Traders will likely buy Chicago going home looking for a turnaround Tuesday bounce. How vigorous a Tuesday bounce occurs could provide some insight as to the health of Chicago heading into the weekend. It feels likely that we will see additional selling pressure in corn and soybeans into the end of the week with wheat trying to forge a seasonal low.
- Chicago brokers estimate that funds have sold 4,700 contracts of corn, 2,100 contracts of soybeans, and 900 contracts of wheat. In the soy products, funds have sold 1,500 contracts of soymeal and 1,200 contracts of soyoil.
- US weekly export inspections for the week ending June 18 were; 51.0 million bu of corn, 9.4 million bu of soybeans and 22.5 million bu of wheat. For their respective crop years to date, the US has shipped out 1,260 million bu of corn (down 381 million or 23%), 52 million bu of wheat (up 4 million or 8%) and 1,340 million bu of soybeans. US crop year soybean exports are up 4 million bu or 0.3%. China shipped out just 2.9 million bu of soybeans last week as they continue to take record tonnages of the 2020 Brazilian harvest.
- Confusion is what China has sown in terms of seeking signed affidavits that grain/soy/meat import cargoes are Covid-19 free. Commercial traders argue that it is humans that spread the virus, not raw materials following 60-72 hours. Yet, China new Covid-19 food safety regulations have not been fully explained. It appears that the meat values are being impacted to a larger extent on China’s CIQ (China Inspection and Quarantine) virus free certification with world grain traders hopeful that this new protocol will be ended. However, if by the end of the week there is not an abandon of China’s Covid-19 certification demand for grains, reality will set in of China’s intent in managing its food imports.
- The Brazilian winter corn harvest surpassed 10% this weekend with reported yields being far better than expected. Mato Grosso corn yields are record large while yield losses are less than expected in Parana and RGDS. There is a better than a 50/50 chance that Brazil will equal or set a new total corn crop estimate this year at 102 million mt or more.
- IA/WI has received needed rainfall this morning with showers ongoing. Rainfall totals of 0.25-1.50″ have helped replenish soil moisture with the system to push eastward into the E Midwest overnight.
- A progressive weather pattern will be maintained across North America over the next 2 weeks (ending July 8). Short waves in a strong NW flowing jet stream look to produce showers/storms every 3-4 days. Rainfall totals with each system are forecast in a range of 0.5-2.00″ with the best chance for heavy rain occurring across IL, IN and OH.
- The 11-15 day forecast calls for a trough to pull over the top of a ridge impacting the Upper and Eastern Midwest between July 3-7. A few warm days will be felt between June 30 and July 3, but no lasting extreme heat is projected. The GFS model continues to outperform the EU model (EU model upgrade due on July 1). The Central US forecast is warm/wet which favours well established Midwest crops.
- Central US weather is the “driver” of price with a warm/dry first 2/3′s of June likely to produce a warm/wet late June and early July. US record large corn yields are produced when an early dry June is followed by a wet late June and early July. Amid favourable Central US weather, any Chicago rallies will be limited with a key USDA June Stocks/Seeding report due in just five trading sessions.