Headlines:
- USDA ACREAGE REPORT IS SCHEDULED FOR JUNE 30TH
- FIRST NOTICE DAY FOR JULY GRAIN AND OILSEED FUTURES IS THURSDAY, JUNE 30TH
- GRAINS EXTEND LOSSES AS US WEATHER IMPROVES
GRAIN FUTURES EXTENDED THEIR LOSSES, AS THE FORECASTS CONTINUED TO PUSH MORE MOISTURE INTO THE US MIDWEST, EASING ROW–CROP WORRIES. AND WHEAT CAME UNDER PRESSURE AS HARVEST CONDITION IMPROVED IN THE US PLAINS. THE IMPROVING WEATHER OUTLOOK ENCOURAGED A SELL–OFF, DESPITE SOME GOOD US EXPORT NUMBERS, IN A MARKET THAT HAS SEEN VERY HEAVY FUND BUYING. “WEATHER MAPS ARE DRIVING PRICE DIRECTION AND THE FUNDS HAVE CERTAINLY ACCUMULATED A BELLY FULL OF LENGTH THE LAST SEVERAL WEEKS,” SAID TREGG CRONIN, AT HALO COMMODITIES. “IF THE FUNDS DECIDE TO PAIR BACK EXPOSURE A BIT, IT REMAINS UNCERTAIN WHO MIGHT BE THERE TO BUY” HE WARNED.
Summary:
Forecast weather conditions are improving and Managed Money does not appear to have an appetite for taking any chances. Export sales were strong for both Soybean marketing years. Old crop was well over the high range of expectations and the new crop was pretty much at the high end of expectations. New crop sales were the largest of the year with commitment still coasting ahead of USDA estimates. Corn sales were on the low end of expectations for both crops with the old crop sales hitting a 6 week low. Wheat sales were outstanding, blowing away expectations. The sales number was the largest in almost a year.
Crude Oil appears to finally be selling off. We have been looking for it to make a top and after two head fakes it is picking up steam to the downside. Today marks the 6th consecutive down day for Crude Oil futures. July and December Corn lost 4 & 4.25 cents respectively today. July and November Beans took it on the chin day surrendering 21.50 & 19.75 cents. December Wheat lost 5 cents.
Managed Money has been the driving force pushing the grain markets higher and as we have warned for several weeks & months ago we suggested that they would be responsible for a quick reversal if the fundamental narrative was not able to create equilibrium with the price action. As we transition from El Nino to La Nina the next two months have the potential to be quite volatile for both Beans and Corn. Soybean will have weather sensitivities primarily in July and the Corn is historically sensitive to August.
