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
- LA NINA FEARS MAY LIMIT FUND SELLING IN AGS, SAYS RABOBANK
THE FUND SELLING WHICH FUELED A COLLAPSE IN CORN SELLING MAY HAVE LIMITS, FOR NOW, RABOBANK SAID – ALTHOUGH CAUTIONING THAT SUGAR COULD PROVE AN EXCEPTION, AND STICKING BY DOWNBEAT PRICE FORECASTS FOR MOST CROPS. THE BANK HIGHLIGHTED THE RISK OF A SELLOFF IN AGS POSED BY THE SURGE OF BULLISH BETS PUT ON BY FUNDS, WITH LATEST REGULATORY DATA SHOWING THE MANAGED MONEY NET LONG AT ITS HIGHEST IN MORE THAN TWO YEARS. “NON–COMMERCIAL INVESTORS HAVE BOUGHT EXTENSIVELY INTO THIS RALLY TO BUILD A NEAR–RECORD NET LONG POSITION ACROSS AGS,” RABOBANK SAID. HOWEVER, IT FLAGGED THAT THE POTENTIAL FOR WEATHER SETBACKS YET – JULY BEING THE CRITICAL PERIOD FOR US CORN YIELDS, AND AUGUST FOR SOYBEAN PRODUCTIVITY – MAY CURB A REVERSAL IN FUND POSITIONING FOR NOW. “WHEN WILL THIS SELL? WITH THE SUMMER MONTHS CRITICAL FOR THE US GRAINS AND OILSEEDS COMPLEX, AND LA NINA POSSIBLY COMING SOON, THEY [NON–COMMERCIAL INVESTORS] MAY STICK AROUND A LITTLE.”
Summary:
Wheat futures rose overnight on the prospect of potential demand as Wheat prices were getting close to that of Corn over the past few month. The overnight advance did not last. Most of the gains were surrendered by the end of the regular trading session. July Wheat was up 1 cent and the December contract was essentially flat up on tick.
As expected Managed Money is on the run. Already this week they have liquidated in the neighborhood of 50 to 60 thousand Corn futures contracts. Corn saw a brief pause in overnight and early trading but still finished low by the end of the day. Weather forecasts continue to be favorable but on the technical side we could see support come in and allow for a breather. July Corn was down 4 cents and December Corn lost 5.75 cents. The latest 7-10 day forecast is still calling for rain.
The Soybean market is not experience nearly as much activity from Managed Money as Corn has seen the past few days. That makes sense because weather in late June and July weather is more important to Corn. Whereas, weather conditions in late July and August is more import to Soybean. Soybean futures held their own today and are potentially sitting near support. The July contract was up 5.25 cents and the November contract was up 5.50 cents. After the USDA announced 126,000 MT of soybeans sold to unknown and 132,000 MT sold to China yesterday, the industry is anticipating additional sales to be announced in the coming days.
British voters will take to the polls tomorrow in a referendum that will determine whether the country will stay in the European Union or not (better known as Brexit). The equity markets are on pins and needles in anticipation of what will result. Each day investors look to surveys to get a feel as to what the vote will be. Day-trading margin requirements have increased (in some cases trifold) this week at a number of firms in anticipation of volatile moves post the announcement.
