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Corn Supported by Dry Weather Forecast

MORNING OUTLOOK

Grains are higher. SU is up 9 cents near 14.15. Overnight high was 14.31. SX is up 9 cents and near 14.01. SMU is near 365.0. BOU is near 66.94. CU is up 9 cents and near 5.65. New range could be 5.60-5.80.  CZ is up 8 cents and near 5.60. Key resistance 5.97. WU is up 6 cents and near 6.98. KWU is up 6 cents and near 6.58. MWU is up 18 cents and near 9.36. US stocks are lower. Key support 33,300. Asia stocks lower as new US virus cases grow. US Dollar is higher. Resistance is 93.43. Crude is lower on new OPEC production deal. Is Crude worth $65 now? Gold is lower. Most commodities are lower.

Corn supported by dry weather forecast for the Dakotas and MN which account for 20 pct of US corn acres. A 3 bpa drop in US corn yield would drop the 22/22 carryout 250 mil bu. 5-7 drop in yield could suggest a rally in CZ to near 6.50. Drop in South America corn export supplies should increase demand for US corn exports and also lower US carryout. Dalian corn futures were lower.

Soybean futures rallied despite weak soymeal fundamentals and slow US new soybean export demand. Dalian soybean, soymeal, soyoil and palmoil futures were higher. Lower US June NOPA soybean crush offered resistance to soybeans but supported soyoil. Dry weather forecast for the Dakotas and MN could lower yields over 21  pct of US soybean acres. Canada Winnipeg canola futures testing new highs on concern about Canada supplies This is also supporting soyoil prices which supports soybean prices.

Minn spring wheat futures are higher overnight. Concern about NA HRS crop, wet EU crop slowing harvest and lowering quality and hot/dry weather in South Russia could send prices even higher. Forecasts of near record low World exporters stocks to use ratio has some forecasting fall Chicago wheat futures to test 7.20-7.50 and Dec-Feb prices testing 7.50-8.00.

On Friday, Managed funds were net buyers of 10,000 contracts of SRW Wheat; 6,000 soybeans, 1,000 soymeal and 2,000 soyoil; and sold 3,000 corn. We estimate Managed Money even SRW Wheat; long 214,000 Corn; net long 88,000 Soybeans; net long 21,000 lots of Soymeal, and; long 56,000 Soyoil.

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