Grains Slightly Higher This AM

by Steve Freed,

Grains are mixed. SN is unchanged and near 8.45. CN is up 1 cent and near 3.21. WN is up 1 cent and near 4.98. US Stocks are marginally lower after Mondays big gains. US Dollar is lower. Crude is higher.

USDA estimated US corn plantings at 80 pct versus 71 average and 44 last year. Crops are almost planted in IA, MN and NE. Crop plantings are delayed in OH, MI and IN. Heavy rains could force replanting in IL. There is talk that ND may not plant half of their intended corn acres. Most look for first US corn crop ratings to be near 73-78 pct good/ex. Drop in US ethanol demand and higher US 2020 supplies will offer resistance near 3.25 CN and 3.39-3.46 CZ.

Brazil corn crop is estimated near 96 mmt. Farmer has sold 66 pct of the 2019/20 crop. Brazil GDP was up 8.6 pct due to gains in Ag. This is largest increase in 31 year. Argentina corn crop harvest is 40 pct with crop estimated at 49 mmt and rated 36 pct good/ex. Argentina May corn exports could be near 3.5 mmt vs 2.8 ly.

USDA estimated US soybean plantings at 53 pct versus 38 average and 18 last year. Here again best gains were in west with delays in east and Delta.  There is strong resistance near 8.70-8.90 SX. Support is from potential China buying. Steep discount to lower Argentina July soymeal prices could impact US demand.

Brazil soybean crop is estimated near 121 mmt. Farmer has sold 80 pct of the 2019/20 crop and 28 pct of 2020/21 crop. Drop in currency has soybean prices near all-time highs. Argentina soybean crop is still estimated near 50 mmt. 87 pct of the crop is harvested. Crop is rated 21 pct good/ex. Argentina economy is worsening and could impact World trade.

USDA dropped US winter wheat ratings to 53 pct goof/ex. Drop were in CO, OK and TX. Gains were in KS and PNW. Dryness across north Europe and SW Russia could offer support to wheat. USDA estimate of record 2020 Wheat supplies still has funds selling wheat futures. Lower new crop Russia wheat prices also weighs on wheat futures.

Managed funds were net sellers of 2,000 contracts of SRW Wheat; net bought 3,000 Corn; net bought 6,000 Soybeans; net sold 2,000 lots of Soymeal, and; net bought 5,000 Soyoil. We estimate Managed Money net short 11,000 contracts of SRW Wheat; net short 230,000 Corn; net long 29,000 Soybeans; net short 18,000 lots of Soymeal, and; net short 1,000 Soyoil.

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