Post Market Wrap Up June 15

Headlines:

– NOPA CRUSH WILL BE RELEASED TOMORROW AT NOON EASTERN

– USDA ACREAGE REPORT IS SCHEDULED FOR JUNE 30TH

– FIRST NOTICE DAY FOR JULY GRAIN AND OILSEED FUTURES IS THURSDAY, JUNE 30TH

– WIDESPREAD ILLEGAL GMO PLANTING IS A PROBLEM IN UKRAINE
REPORTS THAT 80% OF UKRAINE’S SOYBEAN CROP IS GROWN FROM ILLEGAL GENETICALLY–MODIFIED SEEDS ARE “PROBABLY TRUE,” MYKOLA KOVALSKI, ACCORDING TO THE CHIEF STRATEGY OFFICER AT ASTARTA. ASTARTA, A UKRAINIAN AGRIBUSINESS WHICH IS THE COUNTRY‘S LARGEST SUGAR PRODUCER, BUYS NON GM SEEDS FROM CANADA, SAID MR KOVALSKI. THE NON-GM MEAL PRODUCED MEANS THE COMPANY RECEIVES A PREMIUM FOR ITS PRODUCT. BUT MR KOVALSKI NOTED THAT IT WAS “DIFFICULT TO ESTIMATE” THE SCALE OF GM PLANTING ACROSS THE COUNTRY, WITH FIELDS OF NON-GM AND GM SOYBEANS PLANT “IT IS A PROBLEM FOR US” HE SAID. LAST MONTH THE US DEPARTMENT OF AGRICULTURE NOTED REPORTS THAT THE LARGE MAJORITY OF UKRAINE‘S SOYBEANS CROP WAS GROWN FROM GM SEEDS, DESPITE PLANTING OF SUCH CROPS BEING ILLEGAL. MOSANTO‘S ROUNDUP READY SEEDS, AN HERBICIDE–RESISTANT VARIETY, ARE BELIEVED TO BE THE MOST WIDELY PLANTED. THE USDA SAID THAT AROUND 10% OF THE COUNTRY‘S CORN CROP IS BELIEVED TO BE GENETICALLY MODIFIED. CHINA, THE WORLD‘S MAIN SOYBEAN IMPORTER, HAS STRICT CONTROLS IN PLACE FOR THE IMPORT OF GM CROPS.

Summary:

This summer, temperatures and rainfall in the north and eastern portions of the Midwest are forecasted to be closer to average than other areas of the Corn Belt. According to Dale Mohler a senior meteorologist at AccuWeather, “Rainfall for the summer will be about 90% of normal in the northwest and 80% in the east. Temperatures will be about 2° above average in the east.” Corn and Soybean appear to be responding to these areas receiving some beneficial rainfall over the past few days that looks to continue into tomorrow morning for the eastern parts of the belt.

The NOPA crush for May was the highest on record for the month at 152.8 million bushels exceeding expectations by 3.2 million bushels. The crush number was 2nd only to the 148.4 million bushels

May 2015 now becomes the second largest crush number at 148.4 million bushels.

“Minnesota, the northeast half of Iowa, Wisconsin, and northern Illinois received more rain than anticipated yesterday,” says Mohler. “Some areas received over an inch while others had two to three. That system will continue into Indiana, Ohio, and parts of Kentucky today and tomorrow.”

Temperatures in these areas will remain hot through Sunday and Monday. Then a cold front will move through bringing temperatures back down to normal, primarily in the 80s, according to Hicks.

That cold front will bring .- to .-inch of rain in 60% of the Midwest. The next chance for significant rainfall will be on Wednesday and Thursday.

“There’s a chance for widespread rain that will bring 1 to 1.5 inches of rain through the heart of the belt,” explains Mohler. “That event is a little in question because it isn’t showing up on all of the weather models. If that rain doesn’t materialize, areas will be hurting.”

A mixture of strong crop progress and persistent profit taking kept grain market futures in check in early trading today. Corn, Soybean and Wheat all recovered off of their intraday lows with only Corn and front month Beans returning to positive territory heading into the close. The USDA report showed that about 75% of Corn and Beans were in good or excellent condition. November Beans has yet to reach 1200 and the July contract traded above it briefly on June 10th but that did not last very long. It is reasonable to assume that there are a number of limit sell orders at the 1200 level for both contracts.

Even though the crop ratings came in strong we are still very early in the season and it is not uncommon for ratings to be strong initially. The key is whether or not those ratings will hold. According to NOAA’s National Weather Service, the three biggest Corn and Soybean producing states got little to no rain over the past 30 days. The worst of the dry weather has been along the region of central Nebraska and moving east through Iowa into Illinois and Indiana. Additionally there has been extremely dry weather in Michigan. Those five states produce just over half of the country’s Corn crop so we know conditions can change quickly if La Nina hit. Rain is forecast for parts of the Midwest this week. If beneficial rains persist look for prices to be held in check.

July and December Corn each finished up 6.50 cents today. July Beans was up 0.50 cents and November Beans down 9.50 cents. July Wheat was down a 4th consecutive day losing 4.50 cents. July Crude was down a 4th consecutive day as well but found support at just above our 47.50 level.