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June 29 Afternoon Comments

Soybeans and soyoil rallied and followed higher trade in corn and wheat. Short covering before USDA report and deliveries helped rally corn and wheat from season lows. US stocks were higher. Crude was higher.

 

SOYBEANS

Concern about demand for US soybeans and USDA confirming US farmers increased soybean acres above early intentions offered resistance. US 6-10 day and 8-14 day forecast of hot and dry weather may have also triggered some either short covering or new buying. Weekly US soybean exports were only 12 mil bu versus 26 last year. Season to date exports are 1,352 versus 1,363 last year. Tuesday, USDA will release estimates of US June 1 stocks and US 2020 acres by crop. Trade estimates US June 1 soybean stocks near 1,392 mil bu versus 1,783 last year, Trade also estimates US 2020 soybean acres near 84.8 million versus USDA March guess of 83.5 and 76.1 last year, Most look for US 2019/20 soybean carryout to be near 580 mil bu, US 2020 crop near 4,250, total demand 4,380 and 2020/21 carryout near 470 versus USDA 395. This could limit the upside in SX over 8.80.

 

CORN

Corn futures traded higher on short covering in front of July first notice, USDA acreage and June 1 stocks report, month end and quarter end. US Midwest 6-10 day forecast of warm and dry weather could have also triggered some short covering. Warmest and driest weather will be the July 4 weekend. The extended models suggest the ridge of high pressure will then move back west and allow for normal showers around July 9.Mondays actual US Midwest 2 week weather forecast could be key to corn price direction. Weekly US corn exports were near 48 mil bu versus 11 last year. Season to date exports are 1,308 versus 1,644 last year. Tuesday, USDA will release estimates of US June 1 stocks and US 2020 acres by crop. Trade estimates June 1 corn stocks near 4,959 mil bu versus 5,202 last year Trade also estimates US 2020 corn acres near 95.1 million versus USDA March guess of 97.0 and 89.3 last year. , Most look for US 2019/20 corn carryout to be near 2,150 mil bu, US 2020 crop near 15,700, total demand 14,800 and 2020/21 carryout near 3,150 versus USDA 3,323. This and large US farmer unsold inventory could limit the upside in CZ over 3.40.

 

WHEAT

Wheat futures rallied on short covering before July contract first notice, USDA acreage and June 1 stocks report. End of month and quarter end trading may have also offered support. Wheat futures have dropped recently to new lows on active US winter wheat harvest and lower Europe prices. Lower Europe prices may be more of a function of concern about Demand than lower supply. Trade estimates US winter wheat harvest near 44 pct down and crop rated 51 pct good/ex. Trade also estimates the US spring wheat crop near 75 pct Good/ex. Weekly US wheat exports were near 19 mil bu versus 25 last year. Season to date exports are 73 versus 73 last year. Tuesday, USDA will release estimates of US June 1 stocks and US 2020 acres by crop. Trade estimates US June 1 wheat stocks near 987 mil bu versus 1,080 last year. Trade also estimates US 2020 wheat acres near 44.7 million versus USDA March guess of 44.7and 45.2 last year. Large World wheat supplies limits the upside in prices.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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