Written Commentary
AM Grain Outlook
Grain calls are mixed to marginally higher. SN is up 2 cents and near 8.71. CN is up 3 cents and near 3.32. WN is unch and near 5.04. Surprise drop in US weekly corn ratings is helping corn, China buying US soybean is supporting soybeans. Stocks are higher after Fed action. Concern of a second outbreak of the virus still offers resistance to commodity prices.. US Dollar is lower. Crude is higher. Gold is higher.
This week US Midwest weather will be most dry with warming temps. One of the largest precipitation changes in last night’s GFS model run was the increase of moisture across the Hard Red Winter Wheat Region Jun. 25 – 27. The central and southern plains will receive some beneficial rainfall Wednesday through this upcoming weekend; this will help increase soil moisture, especially locally, and may reduce the severity of the drought some. Follow up rainfall and some erratic thunderstorm activity is likely Jun. 25 – 27.
Soybean market will be watching China buying news, US weather patterns and Washington politics. USDA rated the US soybean crop 72 pct good/ex. Only state that is below trend yield is ND. Trended yield states are AR, IL, MI, MO, OH and TN. Above trend is IA, MN, NE, SD and WI. 4 pct of the crop is below trend, 49 trend and 36 above. Yield is estimated near 51.0.
Corn numbers are bearish unless there is a weather problem. USDA dropped ratings to 71 pct good/ex. Only state below trend is OH. Trend yield states are IL, IN, MO and NE. Above trend is IA, MN, SD and WI. 5 pct of the crop is below trend, 49 pct trend and 36 above trend. Some concern about dryness in IL and IN. Conditions suggest a 179.5 yield.
15 pct of the US winter wheat crop is harvested. USDA dropped US winter wheat rating to 50 pct good/ex. Lowest ratings are in CO, TX, MO, AR, NE, KS and OK.. USDA also dropped spring wheat ratings to 81 pct good/ex. This is still above average. Black Sea wheat prices remain firm and US fob prices are now more competitive. Rains in N Europe helped drop Matif wheat futures to 3 month lows.
On Monday. Managed Money were net even SRW what, sold 3,000 corn, sold 2,000 soybeans, sold 1,000 soymeal and bought 2,000 soyoil. We estimate funds are net short 27,000 contracts of SRW Wheat; net short 296,000 Corn; net long 27,000 Soybeans; net short 52,000 lots of Soymeal, and; are net short 5,000 Soyoil.
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