Headlines:
- THE BREXIT VOTE IS SCHEDULED TO TAKE PLACE ON THURSDAY, JUNE 23RD
- USDA ACREAGE REPORT IS SCHEDULED FOR JUNE 30TH
- FIRST NOTICE DAY FOR JULY GRAIN AND OILSEED FUTURES IS THURSDAY, JUNE 30TH
- DESPITE THE BRAZILIAN CORN SHORTAGE, THE COUNTRY IS PLANNING TO SHIP CORN IN AUGUST TO THE US. A VESSEL IS SCHEDULED TO HIT WILMINGTON, NORTH CAROLINA ON AUGUST, 12TH
- BRAZILIAN CORN PRICES TUMBLE AS HARVEST PICKS UP PACE
BRAZILIAN CORN PRICES ARE PLUMMETING AS THE SECOND CROP CORN HARVEST PICKS UP PACE, AND LEGISLATORS IN KEY GROWING STATES DEBATE NEW EXPORT TAXES. PRICES IN BRAZIL PEAKED ALONGSIDE CHICAGO MARKETS, ON JUNE 8, BUT THE PACE OF THE BRAZILIAN SELL–OFF HAS BEEN FAR SHARPER. “CORN PRICES BEGAN TO FALL HARD LAST WEEK, ESPECIALLY IN PARANA AND THE MIDWEST,” SAID THE BRAZILIAN THINK TANK CEPEA. “AS THE SECOND CROP CORN HARVEST IN THE CENTRE-SOUTH OF THE COUNTRY ADVANCES, DOMESTIC GRAIN AVAILABILITY IS GRADUALLY INCREASING,” CEPEA SAID. “FOR ALMOST THE FIRST TIME THIS YEAR, BUYERS FACE… CAN EXERT PRESSURE.”
Summary:
Selling pressure continues to come in the form of beneficial rain forecasts. Corn futures dropped over 5.5% as weather concerns subside. Additionally, the USDA weekly Corn crop rating was better than analysts’ expectations. The damage that was anticipated is just not materializing. The 75% rate for good or excellent is only 1% point off the all-time record for this date. With the weather improving, you can bet that Managed Money with large net positions are starting to get a bit nervous.
July and December Corn had back to back double digit losses as did November Beans. July Beans was 1 tick off of having a second double digit loss day. Both Corn contracts fell 24 cents today. Meanwhile July Beans was off 9.75 and November Beans unloaded 22.75 cents. Wheat was not immune to the sell off today. July Wheat lost 13.25 cents and December Wheat shed 13 cents.
We are probably seeing panic selling on the part of funds, speculative investors and some producers. Several participants had been lulled into believing that prices would keep moving up and volatile moves like we are seeing are the result of failing to take advantage of pricing at profitable levels. The lesson here is to not wait for unrealistic prices.
Private export activity that was reported to the USDA today included:
- Export sales of 132k metric tons of Soybeans for delivery to China during the 2016-17 marketing year
- Export sales of 126k metric tons of Soybeans for delivery to unknown destinations. Of the total, 66k metric tons is for delivery during the 2015-16 marketing year and 60k metric tons is for delivery during the 2016-17 marketing year
- Export sales of 40k metric tons of soybean oil for delivery to China during the 2015-16 marketing year
