Morning Highlights


 

Highlights

  • USDA planted acres and June 1 stocks report tomorrow, June 28th, 11 am CDT.

  • First Notice Day for July futures is tomorrow, all long positions will be reported after the close today.

  • Pres Trump arrives in Japan for the G-20 summit.

  • Nymex crude oil is down $0.55, the US$ index is 10 ticks lower and Dow futures are 37 points lower.   

     

Corn

  • The corn market consolidates ahead of tomorrow’s USDA data and first notice day. US weather turns warmer which will aid in crop development.

  • Average trade guesses for planted acres are around 86-87 million, down from the June 10th report of 89.89 million and well below the March planting intentions of 92.8 million.

  • The June 1 stocks estimate is 5.332 billion bushels, this compares to 5.305 billion a year ago.

  • Domestic cash markets remain firm, providing support as the market works to get available corn supplies to move from surplus areas to areas of need. FOB US export values remain at a $10 to $25/mt premium to Black Sea and S America.

  • The 6 to 10 day forecast through July 6 shows much of the country with above normal temperatures and above normal precipitation. There is talk of a short term ridge.

  • Managed money is estimated to carry a net long position of 152k. Open interest changes yesterday saw CN down 53,486, CU increased 10,272 and CZ gained 14,177 contracts.

  • Spreads are nominally mixed: N/U 6 ¼ carry, U/Z 5 ¼ carry, Z/H 4 ¾ carry, Z/N 7 carry. N20/Z20 is a 42 ¼ cent inverse.

     

Outlook:  Fractionally higher but without clear direction as the market waits for fresh news.

 

Oilseeds

  • The soybean market is lightly mixed with SN headed toward first notice day below $9.00 with support at the 100 day MA of $8.92 ½. SX are trending lower but remain above the 100 day MA of $9.14 ¼ and the $9.00 mark.

  • The USDA acres report tomorrow is likely to reveal the lateness of this year’s planting season and has a possibility of a need to resurvey. Average trade guesses are around 84.35 million, only down slightly from the March intentions of 84.6 million but well below last year’s 89.2 million.

  • Malaysian palm oil was lower overnight for the fourth day this week and China’s Dalian beans were modestly weaker.

  • Managed money remains an estimated net short position on soybeans, soyoil and soymeal. Open internet changes yesterday: SN down 25,883, SQ increased 7,458 and SX gained 6,380 contracts.

  • A meeting between President Trump and President Xi is planned at this week’s G20 summit. Nothing of substance is expected to result as both are expected to present their terms for trade war resolution.

  • Spreads: N/Q 5 ¾ carry, N/X 24 ½ carry, X/F 11 ½ carry, X/N 28 ¾ carry.

 

Outlook: Slightly higher ahead of tomorrow’s USDA reports.

 

Wheat

  • Europe sees a heat wave with record June temperatures from Germany to France. Their wheat crops have been looking good but worry that the rising temps will trim production is supportive.

  • All three US wheat markets react higher off the extreme European heat ahead of tomorrow’s USDA acres and stocks report. The average trade guess for the June 1 carryout stocks is 1.1 billion bushels, just slightly below the June 11th balance sheet of 1.102 billion. All wheat acres are expected to be lowered on smaller than intended spring wheat. Spring wheat estimated acres are 12.595 million vs 12.830 intended in March and 13.2 million a year ago.

  • Paris milling wheat futures are higher overnight.

  • Seeing some private estimates for Canada’s production slip to around 32mmt, on par with last year, but below the current USDA guess of 34.5mmt.

  • Ukraine and Russia have begun harvest and US HRW harvest continues to struggle with muddy fields. Overall yields and quality are about as expected with no major concerns.

  • Overall, the US remains uncompetitive in the global export arena with the FOB US exports values well below Black Sea and European offers.

  • Spreads: Mpls N/U 8 ¾ carry, U/Z 14 ¼ carry, Kansas City N/U 13 carry, U/Z 21 carry, WN/U 2 carry, U/Z 8 ¾ carry.  

     

Outlook: Stronger as Europe’s temperatures heat up.