Written Commentary
SOYBEANS
Managed funds continue to liquidate soybean and soymeal longs on US central Midwest rains and lack of new US soybean export demand. Talk of warmer and drier US NW Midwest July weather and that US 2020/21 soybean carryout could be lower than USDA June guess and below 100 mil bu. Soybean futures have dropped despite drop in weekly US crop ratings. Money is focused on US central Midwest rains and slow soymeal demand. Weekly US export sales are est near 200-800 mt vs 6 last week. USDA announced 300 mt of US new crop soybeans were sold to China. Index funds continue to be record long and grain and oilseed futures. Commercials are also near record short grain and oilseed futures. Key will be summer weather, China demand and USDA June 30 report.
CORN
Corn futures closed mixed. CN continued to gain on CU as delivery neared. This could be due in part to slow farmer selling and tightening of US corn supply. USDA will est US June 1 corn stocks on June 30 which will give the market a better idea of supply. Managed funds are liquidating long corn positions and some are even selling corn in anticipation of a bearish USDA June 30 corn acreage est. There has also been a round of liquidation of long corn and short wheat positions due to continued gains in wheat futures. Weekly ethanol production was up 2 pct from last week. Stocks were also up 2 pct from last week. Some feel USDA could be 50-75 mil bu too low in their ethanol production guess and 100-150 mil bu to low in their export guess, This could eventually drop is 2020/21 corn carryout below 1,000. Weekly US export sales are est near 200-500 mt vs 276 last week. Index funds continue to be record long and grain and oilseed futures. Commercials are also near record short grain and oilseed futures. Key will be summer weather, China demand and USDA June 30 report.
WHEAT
Wheat futures traded higher. Concern about NA HRS crop is pushing MWU higher. WU and KWU is following. Next 2 weeks US north plains and Canada prairie weather forecast is for warm and dry weather. Some are now looking at 1988 as similar year when only 75 pct of the ND spring crop was harvested and yield was only 15. Some est US 2021 HRS crop near 450 mil bu vs 530 last year. US HRW harvest should advance. Yields are reported above expectations but protein is below average. Some est US 2021 HRW crop at 770 mil bu vs 659 last year. US export demand is slow but some forecast feeding at 100 mil bu. US SRW crop is also forecasted at 335 mil bu vs 266 last year. Carryout could increase to 170 mil bu vs 111 last year. US 2021 white wheat crop is est near 250 mil bu vs 300 last year. Lack of rain could drop crop even more. US 2021 durum crop is est near 55 mil bu vs 69 last year. Carryout could drop to 18 mil bu vs 30 last year. Liquidation of long corn and short position is also helping wheat futures.
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