Written Commentary
SOYBEANS
Soybeans ended higher but off session highs. SU is near 14.45. Range was14.22-14.54. Uncertainty over US summer weather offset slow US soybean export sales. China remains absent in buying US soybeans. US Fed fight against inflation hangs over the soybean market. Soyoil futures continue to drop on concern about Asian demand and higher Indonesia palmoil Exports. One third of weather watchers forecast July US Midwest weather warm and dry. One third suggest normal rains in east after 10 days of dry weather and dry weather for NE, SW IA, KS, MO and Delta. One third has rains across the Midwest for the rest of June and July. This suggest that Mondays 2 week weather forecast will be key for prices. Weekly US soybean sales were only 1 mil bu old crop and 9 mil bu new. Old crop commit is near 2,213 vs 2,268 ly. Next week is USDA stocks and acreage report. USDA est 11 pct of US soybean crop is in drought up 2 pct from last week. IGC est World soybean crop at 390 mmt and 39 above last year.
CORN
Corn futures ended higher. On Thursday Managed funds sold 30,000 corn contracts driving CU down to 6.55. May 16 high was 7.78. Some feel funds have liquidated positions due to losses in financials and energies. There was also a feeling that US Midwest weather was improving. Recent heat and dryness may have stressed the crop especially in east Midwest. USDA estimated that 19 pct of the corn crop was in drought which was up 2 pct from last week. One third of weather watchers forecast July US Midwest weather warm and dry. One third suggest normal rains in east after 10 days of dry weather and dry weather for NE, SW IA, KS, MO and Delta. One third has rains across the Midwest for the rest of June and July. This suggest that Mondays 2 week weather forecast will be key for prices. Post July 4 30 day forecast will also be important. Next 3-4 weeks US Midwest weather could be key for futures price direction over the next 6 months. Grain prices are below value and end users should add coverage. This weeks ethanol data was delayed due to technical problems. EPA will announce 2023 biofuel standards in September. May frozen beef stocks were record high. Pork stocks were up 9 pct from April and 2 pct ly. Poultry stocks were up 26 pct from April. There were concerns about logistical problems getting rail corn to California. Drop on corn supply could force liquidation of poultry. IGC raised World corn crop 6 mmt from their last estimate due to higher Ukraine crop but the crop is still 29 mmt below last year. Bigger crop due higher Brazil. Weekly US corn sales were 26 mil bu old crop and 14 mil bu new. Old crop commit is near 2,375 vs 2,737 ly.
WHEAT
Wheat futures ended lower and near session lows. Managed funds sold 11,000 contracts on Thursday and finally flipping from a net long to a net short. WU ended near 9.36 with a range of 9.34-9.87. WKU ended near 9.98 with a range of 9.97-10.27. MKU ended near 10.70 with a range of 10.67-10.91.Slow US export demand, US HRW harvest, better US and Canada spring wheat weather and improving EU and Black Sea weather continues to offer resistance. Could have been some new buying of corn and selling wheat today. USDA reported that 55 pct of US HRS crop is in drought although most weather watchers 30 day outlook calls for normal rains across US north plains. Concern about global recession slowing World food demand also offered resistance. Drop in commodity Prices though had one Fed Governor suggesting US inflation may have peaked. IGC est World wheat crop at 769 mmt or down 12 mmt from last year. There is still concern about Black Sea wheat exports. Weekly US wheat sales were 17 mil bu new. Total commit is near 193 vs 226 ly.
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