Headlines:
- FIRST NOTICE DAY FOR JULY GRAIN AND OILSEED FUTURES IS THURSDAY, JUNE 30TH
- COTTON AND CORN MARKETS PLUNGE, SOYBEANS SURGE
CORN AND COTTON FUTURES WERE THE LOSERS IN A VOLATILE SESSION FOLLOWING SOME KEY US GOVERNMENT FORECASTS, WITH SOYBEANS BIG WINNERS. BUT WHEAT MARKETS WERE MORE SANGUINE, AS MARKETS SHRUGGED OFF THE INITIALLY BEARISH FIGURES. THE STANDOUT SURPRISE FROM THE US DEPARTMENT OF AGRICULTURE‘S ACREAGE AND STOCKS NUMBERS WAS THE NEWS THAT FARMERS HAD ACTUALLY SOWN MORE CORN, AND LESS SOYBEANS, THAN FORECAST IN MARCH. THE MOVE WAS A SHOCK FOR MARKETS, AS SOYBEAN PRICES HAVE BEEN FAR OUTPERFORMING CORN DURING THE SOWING PERIOD. THE ACREAGE REPORT ALSO HAD BEARISH NEWS FOR THE COTTON MARKET. COTTON PRICES IN NEW YORK MOVED SHARPLY DOWNWARD, AS THE USDA UNVEILED PLANTINGS THAT WERE SOME 500,000 ACRES LARGER THAN EXPECTED, AT 10.0M ACRES. THIS COMPARES WITH A MARCH FORECAST OF 9.6M ACRES, AND LEAVES THE COTTON PLANTED AREA UP 17% YEAR ON YEAR. THE INCREASE IS BEING DRIVEN BY A HUGE BOOM IN TEXAS COTTON SOWINGS, UP 705,000 ACRES YEAR ON YEAR. AND US YIELD PROSPECTS ARE ALSO LOOKING GOOD.
Summary:
The USDA’s increased acreage and stockpiles topping estimates was the death nail for Corn futures today. July Corn fell 11 cents today and December Corn finished 8.50 cents lower sending Corn prices below levels last seen in early to mid-April of this year. Producers were perhaps optimistic that prices might stabilize. Forecasts for seeded area were at 92.8 million acres. Today’s numbers came in well above at 94.1 million acres. Last year at this time 88 million acres of Corn was seeded to give perspective on the size of today’s forecast. Stockpiles as of June 1st beat the 4.53 billion bushels estimates coming in at 4.72 billion bushels also eclipsing last year’s numbers at this time.
Soybean producers 83.7 million acres which was a record but it was below forecasts that were at 83.8 million acres. Inventories far exceeded forecasts of 829 million at 870 million bushels. Today’s numbers crushed last year’s numbers by 243 million bushels. Interestingly enough last week we forecasted that 1076 looked to be significant support for the November contract and that a minimum price object of 1188 was at hand if that support area held with the possibility of rising to 1212 or even 1234. If there is follow through tomorrow we could very well hit our minimum price objective. July Beans rallied 32 cents today and November Beans surged 42 cents. It also bares mentioning that Corn was very close to hitting our downside projections today as well.
Both July and December Wheat finished that day in the middle of their trading ranges and were basically flat on the day. July was up 1.75 and December was up 0.25 cents. Today’s report was perhaps a bit neutral on Wheat. With Wheat being so far extended it is possible that it could enter into a basing pattern.
