Written Commentary
CORN
Prices sunk to new contract lows for spot July and Sept. while Dec traded to a 3 year low. Today’s USDA data was bearish for corn with both stocks and acres above expectations. Both corn and bean acres are likely to be met with skepticism as 3.36 mil. acres of corn and 12.8 mil. of soybeans were not planted at the time of the survey. Let the PP debate begin ! Deliveries against the July-24 corn contract were a bit heavier than expected at 744 contracts. June 1st corn stocks at 4.993 were roughly 130 mil. above the ave. trade guess, however within the range of estimates. Stocks suggest either slightly weaker domestic usage or last year’s crop was possibly understated. Acres at 91.475 mil. were only 1.2 mil. above the average trade guess, however were above the range of estimates. Biggest increases were KN +600k, IA +300k, NE +250k, and MN +200k. Unless weather turns more threatening it will be hard for rebounds in price to hold despite the significant speculative short in the market.
SOYBEANS
The soybean complex closed mixed with beans $.01-$.03 lower, meal was down $1-$3, while oil was up 25-35 as consumption for the production of biofuels continues to rebound. Heavy rains reemerged across areas of the northern plains and NW corn belt over the past 24 hours, renewing flooding concerns and logistical issues in transporting grains and ag. products. Heaviest precipitation leading up to the July 4th Holiday are expected across the central Midwest and Great Lakes region. Lighter amounts in the far WCB and SE. Much of TX is expected to remain hot/dry thru next week with daily highs in the upper 90’s to 100+. Extended forecasts are suggesting a hotter/dryer trend developing across the Midwest by week 2 of July. June 1st beans stocks at 970 mil. bu were slightly above expectations and slightly below our guess of 981 mil. Acres fell 410k from March to 86.1 mil exactly in line with our forecast and down 750k from the average guess. Biggest state declines were in MO down 400k, IA down 300k, OH down 150k with both ND and SD down 100k each. Illinois was up 200k acres. With the lower than expected acres there is less wiggle room for below trend yields in the US if July/Aug turns hot/dry. Bean oil usage in the production of biofuels jumped 4.3% in April to 1.07 bil. lbs. In the first 7 months of the 23/24 MY usage has reached 7.210 bil. lbs. In order to reach the USDA forecast of 13.0 bil. lbs. usage will need to average 1.158 bil. per month. Combined biodiesel and renewable diesel capacity jumped to a record 6.120 bil. lbs. as of the end of April as some large facilities on the Westcoast came on line.
WHEAT
Prices are moderately lower across all 3 classes with Chicago and MGEX down $.04-$.06 while KC was $.05-$.10 lower. All wheat acres at 47.24 mil. were down 260k from March and down 335 from the Ave. guess. Winter acres at 33.8 mil. and spring acres at 11.27 mil. were both slightly below the March intentions and the average trade guess. A hot/dry pattern is also expected the next few weeks for eastern Europe including Ukraine, Belarus, Western Russian and the Baltic states.
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