Written Commentary
GRAIN MARKET OUTLOOK
Grains are mixed. SN is up 1 cent and near 8.67. CN is unchanged and near 3.30. WN is down 3 cents and near 4.95. Key to grains is US summer weather and USDA June 30 acres and stocks report. US stocks are higher. Crude is higher. US Dollar is lower. US stocks have rallied on optimism that economy could recover as US begins to remove some virus restrictions. Fed Chairman remarks triggered the biggest selloff since March. Large amount of free money may have begun to flow back into the market overnight.
Last night’s GFS model run was notably drier in much of the Corn Belt, Delta, and a large portion of the Hard Red Winter Wheat Region Jun. 21 – 26; the decreases were due to the model keeping a ridge of high pressure strong and persistent over these regions. NWS 6-10 day is warm and dry. NWS 8-14 day is warm with normal rains. This 2 week forecast is key to prices.
USDA estimated US 2020/21 soybean carryout near 395 mil bu versus 405 in May. Some are closer to 575. Key to soybean prices is US weather, final US acres and China soybean demand and which origin.
USDA estimated US 2020/21 corn carryout near 3,323 mil bu versus 3,318 in May. Some are closer to 3,800. Key to corn prices is US weather, large Managed fund net short position, and US domestic demand. Some feel it will take a US corn yield of 165 to drop stocks enough to rally prices.
USDA is estimated US 2020/21 wheat carryout near 925 mil bu versus 909 in May. USDA estimated World 2020/21 wheat carryout near a record 316.1 mmt versus 310.1 in May. Key to wheat prices is 2020 harvest pressure and Europe and Black Sea crop size and World wheat demand.
On Thursday, Managed funds were net sellers of 5,000 contracts of SRW Wheat; net bought 13,000 Corn; net bought 1,000 Soybeans; net bought 1,000 Soymeal, and sold 4,000 Soyoil. We estimate Managed Money net short 21,000 contracts of SRW Wheat; net short 269,000 Corn; net long 23,000 Soybeans; net short 46,000 lots of Soymeal, and; are net long 10,000 Soyoil.
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