Markets are called mixed this a.m. behind a overnight mixed
overnight session.
July corn was up 6 cents, Dec corn was unchanged, KC wheat
was off a penny and half, MPLS wheat was unchanged, CBOT wheat was down 2 ½ cents,
July soybeans were up 9 cents, and November soybeans were up 5 cents. At 8:10 outside markets have the US dollar up
a couple hundred points at 80.90 on the cash index, gold is up 8 bucks an ounce,
crude is up about 1.20 a barrel, and the stock market futures are pointing
towards a slightly lower start with the DOW futures off about 24 points.
Not a lot of news out this a.m. After spreads got hit hard yesterday they
seem to have bounced in the overnight session so the main headline seen this
a.m. is tightness on old crop and thus bull spreading.
Weather remains a wild card and likely will until we see how
many acres got lost or switched. Right
now it does look like things are warming up in plenty of areas. It does look like Iowa will continue to get
hit with moisture and the remaining bean acres could be really questioned. Same thing can be said for some of the major
crops that North Dakota grows such as sunflowers and spring wheat. How many acres
won’t get planted?
The one thing we have to ask our self is the areas right
besides those spots that didn’t get planted……….are they garden type spots? Can they make up for the drowned out
spots? For some of the crops maybe the
answer is yes; but right now the drowned out spots seem to get bigger and cover
more area in the very heart of the growing regions for corn and soybeans as well
as sunflowers and spring wheat. Bottom
line is our current weather situation as it pertains to our fundamentals is
very much up in the air.
The first answer we should get is the June 28th
acre report. But keep in mind this is a
survey that has already went out. So how
accurate will it be? Will the USDA make
notes that because of all of the delays that they will re-survey in July and or
August?
If that’s the case will it open the door to late a lack of
adjustments in the July report? If we
still have a 2.0 billion bushel carryout in the July report will the market be
able to hold up? What about when we will
we actually see corn developed enough to have a better chance of quantifying
the yield and actual production? In my
opinion that won’t be until the August report or maybe later? So is there a risk that the USDA doesn’t give
the bulls or the funds a fundamental reason to want to get long our
markets. Yes…………a risk……………doesn’t have
to play out that way but we need to realize that there is a risk that the USDA
is very late to the party and there is also a risk that they just simply never
show up. If carryout is actually closer
to 1 billion would they get their fingers caught in the cookie jar if they kept
it closer to 1.5 or 2 billion bushels of corn?
The bottom line is there are so many un-known factors and
question marks out there that the market really should be range bound; at least
until we see some of those cards dealt and laid out on the table. The next big card will be the USDA acre and
stocks report at the end of June. We
could see the weather cards any or even everyday; just depends how mother
nature wants to play the game.
So for marketing ever day that goes by that we don’t get
that rally that many think will happen; realize that the likely hood slips a
little or the window closes a little more.
So be pro-active and comfortable knowing the risks. Don’t get into a corner where you are forced
to sell grain at a time or levels you really might not like.
Please give us a call if there is anything we can do for
you.
Jeremey Frost
Grain Merchandiser
Midwest Cooperatives
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