Written Commentary
CORN
Prices jumped $.06-$.08 as spreads also rebounded. Much of the agricultural space witnessed a technical bounce heading into the weekend and Monday’s quarterly stocks and acreage updates from the USDA. US weather remains mostly favorable. Extended forecasts remain non-threatening thru the first 10 days of July. The BAGE reports Argentine harvest has reached 55% while holding production steady at 49 mmt, vs. the USDA at 50 mmt. At these price levels the market IMO is clearly discounting record production from Brazil as their 2nd crop harvest accelerates and record yields here in the US. Yesterday Datagro increased their 24/25 Brazilian production forecast 1.3 mmt to 134 mmt, while well below the AgroConsults est. of 150 mmt, it’s above the USDA’s forecast of 130 mmt.
SOYBEANS
Prices ranged from $.05-$.08 higher led by new crop. Nov-25 beans traded to an 8 week low overnight, however held support above the early May low of $10.11 ½ setting up today’s recovery. Today’s rally was capped right at its 100 day MA at $10.32. July-25 meal rebounded after making new contracts lows for the 6th consecutive session while also making a fresh 9 year low. Census crush from May-25 will be released after the close on Tues. July 1st. July-25 oil consolidated just above $.52 lb. in 2 sided trade. Key biodiesel and RD production and capacity data is due next Monday. Beans likely drew support from some progress in trade negotiations with China however causing crush margins to retreat. China has agreed to export rare earth metals and magnets to the US in exchange for the US dropping tariffs and restrictions on semiconductors. No mention of Chinese imports of US agricultural goods. Spot board crush margins slipped $.05 ½ to $1.45 ½ bu. while bean oil PV held steady at 49.2%. New crop margins fell $.08 to $1.88 ½ bu. The USDA announced the sale of 120k mt (4.4 mil. bu.) of soybeans to Mexico for the 25/26 MY. Stats Canada reports canola acres at 21.457 mil. were down from 21.6 mil. in March and below expectations of 21.7 mil. The BAGE reports Argentine harvest has reached 98% while holding their production forecast unchanged at 50.3 mmt, vs. the USDA est. of 49 mmt. Argentine farmer sales have spiked in June ahead of the export tax increase to 33% July 1st, up from the current 26%. Taxes on soybean oil and meal will jump to 31% up from the current 24.5%.
WHEAT
Prices were mixed ranging from $.02 lower in KC to $.04 higher in CGO. Nearby spreads weakened ahead of FND on Monday for the July contracts. Nearby KC spreads collapsed to new lows. Inside trade for Sept-25 CGO with resistance at the 50 day MA at $5.53. Sept-25 KC slipped to a 6 week low. Wheat areas in Australia and Argentina are in need of rain. Dry conditions in Argentina have enabled plantings to reach 73%, slightly behind YA however ahead of the historical average. Much better progress for winter wheat harvest here in the US this week. After 5 weeks of short covering speculative traders have turned net sellers again for the past 5 sessions. Stats Canada reports all wheat acres at 26.925 mil., down from 27.475 in March. Spring wheat acres at 18.809 mil. were down from 19.4 mil. in March and below expectations of 19.2 mil. Durum acres at 6.532 mil. were above expectations of 6.3 mi. The USDA lowered WW acres in the June report 5 of the last 6 years.
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