THE OPEN
Nov beans: 4 lower
Dec meal: .40 lower
Dec soyoil: 27 lower
Sep corn: 3 3/4 lower
Sep wheat: 2 lower
The markets opened as called with prices selling off further led by corn, which found sell-stops waiting under key support levels of trade. Recent rainfall activity with good weather spurs chatter around the country that crops are by and large looking very good, with the potential to see a record. Wheat/corn and wheat/bean spread activity was noted throughout the trading session.
Oilshare found light support as traders returned to a buy soyoil/sell meal trade. Energies turned higher which lightly supported soyoil. Beans found sell-stops as well. China is on holiday for the next two days with its Dalian Exchange closed. Consumer pricing ideas remained below the market while farmer selling ideas are above, but no doubt today was an exchange of ownership as fund selling was noted into commercial hands.
The International Grains Council, (IGC), forecast the 20/21 global corn crop at 1.172 mln mt, up 3.0 mln mt vs. the prev. estimate. The IMF also forecast the 20/21 global wheat crop at 768 mln mt, vs. 766 mln mt prev.
SOY
- The soy complex traded lower with sell-stops triggered under key support at $8.65 to move slightly to the downside of recent trading ranges, while Dec meal traded to the bottom of its recent range as well with lows at $290.00.
- Poor export sales for beans and meal contributed to declines and more selling pressure. Sep. crush traded to 80.18c/bu while oilshare fell to 32.70%. December soyoil futures traded lower, but found support as prices neared the 28c level.
- Nearby spreads were slightly weaker but July/Nov still trades with a 2 1/4c inverse while July/Aug. trades to a 3 3/4c high from 2 3/4c.
- December meal prices exited its congestion pattern to the downside, which is consistent for trading ranges that remain consistently lower. Would look for Dec. meal to possibly trend down towards major support lines which would be located at new contract lows of $287.50, though Dec. soyoil should find good support should it sell-off towards 28c.
GRAINS
- Good weather, ethanol challenges, and poor export sales this AM found sellers waiting from the starting block in corn, which triggered sell-stops as key support levels were violated. Sep. corn triggered sell-stops under $3.20 where multiple lows had been sitting.
- New selling pressure came to both Sep. and Dec. corn, which should show an uptick in open interest tonight if new positions were opened. In terms of momentum, the stalling down-trends in corn were recharged, again as prices now remain just shy of contract lows at $3.15 in Sep.
- Dec. corn set a new contract low at $3.24. Corn spreads which were firmer widened out as prices broke, with July/Dec moving from 7 3/4c out to 10 3/4c at midday. July/Sep corn traded from 1 3/4c to 3c carry.
- Wheat prices were steady as traders sold corn/bought wheat. Sep wheat/corn traded from 1.70c down to 1.59c. Sep. wheat futures found light support at $4.83 which promoted a lack of selling. KC wheat found the brunt of selling with traders buying Chicago and selling KC.
AT 12:00 THE MARKETS ARE AS FOLLOWS:
HI LO
Nov beans: 7 lower 8.70 1/2 8.60
Dec meal: 2.50 lower 293.60 290.50
Dec soyoil: 8 lower 2852 2821
Sep. corn: 7 lower 3.27 3.17 1/2
Sep. wheat: 1/2 higher 4.91 3/4 4.83 1/4
Nov canola: 2.50 lower 472.30 468.50
OUTSIDE MARKETS
The Dow opened 170 pts lower but traded to unchanged during the morning session. Crude oil prices rose to $38.72/barrel with the US dollar rising to 97.59. US initial weekly jobless claims were down 60K at 1.48 mln for the week ending June 20, vs. an expected 1.350 mln.
CLOSING COMMENTS
Prices broke hard today and traders were surprised at the extreme weakness. The combination of poor exports and good weather took the weather premium back out of the corn market, as reports of good potential filters throughout the marketplace. Worries about a second wave of the virus and new shut-downs in states that are open weighed as well. However, would opine that breaks in the soy complex are still a good buying opportunity, while corn prices at current lows should also find good support. If short, would cover something in or price.
Trade guesses were released for the June 30 Stocks/Acreage report on Tuesday. Advertised guesses are as follows:
Acreage
Corn: 95.205 mln (vs. 2019 at 89.70)
Beans: 84.76 mln (vs. 2019 at 76.10)
All Wheat: 44.707 mln (vs. 2019 at 45.158)
Stocks (as of June 1)
Corn: 4.9 bln bu - down from 5.2 bln bu June 1, 2019
Beans: 1.3 bln bu - down from 1.783 bln on June 1, 2019
Wheat: 979 mln bu - down from 1.0 bln bu on June 1, 2019
TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America
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