Morning Highlights


 

Highlights

  • USDA planted acres and June 1 stocks report at 11 am CDT.

  • First Notice Day for July futures is today.

  • Pres Trump to meet with China’s Pres Xi tomorrow on the sidelines of the G-20 summit.

  • Nymex crude oil is steady, the US$ index is 100 ticks lower and Dow futures are higher.   

     

Corn

  • The corn market consolidates in a slightly weaker trend ahead of the 11am June 1 stocks and planted acres report. End of month and end of Q2 positioning noted.

  • Weather turns warmer as the corn crop begins its rapid growth and development stage with ample moisture supplies.

  • 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 on strong demand but continuing weak export sales are a signal that US supplies are overpriced in the global marketplace.

  • The 6 to 10 day forecast through July 7 shows much of the country with above normal temperatures and above normal precipitation.

  • Managed money is estimated to carry a net long position of 146.62k. Open interest declined yesterday with CN down 59,300, CU up 19,000 and CZ gaining 13,300 contracts.

  • Spreads are fractionally weaker: N/U 6 carry, U/Z 6 carry, Z/H 6 carry, Z/N 9 ¼ carry.

  • Deliveries: 790 contracts.

     

Outlook:  Weaker ahead of today’s USDA report.

 

Oilseeds

  • The soybean market is higher headed into the 11am USDA report.

  • Technically SQ appears to possibly be running into overhead resistance at its 200 day MA of $8.98, and also risks $9.00 being resistance.

  • Managed money remains an estimated net short of 71k, 10k soymeal, 48k soyoil. Open interest was nominally changed yesterday with SN down 19,100, SQ up 6,500 and SX increasing 8,400.

  • Light deliveries of 5 soybean contracts. Soyoil and soymeal deliveries were heavier at 1,711 and 745 contracts respectively.

  • Average trade guesses for the USDAS planted acres are around 84.35 million, only down slightly from the March intentions of 84.6 million.

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

  • A meeting between President Trump and President Xi is planned tomorrow on the sidelines of the G20 summit. Both are expected to present their terms for trade war resolution.

  • US ag attache’ to Brazil predicts an 800,000 hectare increase of planted acres in 2019/20.

  • Spreads: N/Q 5 ¼ carry, N/X 23 ½ carry, X/F 11 ½ carry, X/N 34 ¼ carry.

 

Outlook: Higher ahead of the USDA reports.

 

Wheat

  • Europe continues to see a heat wave with record June temperatures from the Czech Republic to Germany and France, raising production concerns.

  • Paris Milling wheat futures are quietly unchanged.

  • Deliveries: 5 KC HRW, 0 Chicago SRW, 862 MGEx

  • USDA acres and stocks report at 11am. 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.

  • Ukraine and Russia have begun harvest and US HRW harvest increases though soggy fields continue to hamper progress. Overall yields and quality are about as expected with no major concerns in both the Black Sea and US.

  • 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 5 ½ carry, U/Z 13 ¾ carry, Kansas City N/U 12 1/2 carry, U/Z 21 ¾  carry, WN/U 1 inverse, U/Z 9 ¾ carry.  

     

Outlook: Weaker with the USDA reports on the docket at 11am.