** 6:30 AM CST CBOT Prices: July soybeans are up 3.50 cents at $9.425, July corn is down 4.50 cents at $3.795 while July Chi wheat is unchanged at $4.6525
** AgResource AM Grain & Oilseed Comment: Good Morning! The overnight CBOT trade is mixed with soybean/wheat futures firmer, while the corn market hangs in the red. The volume of trade has been large with more than 42,000 contracts of July corn, more than 17,000 contracts of July Chi wheat, and more than 24,000 contracts of July soybeans changing hands. ARC notes that July options expire on Friday with the NASS June Stocks/Seeding Report set for June 30th.
Central US weather forecasts are neither extremely threatening nor favorable enough to sustain any kind of CBOT price trend. The Central US weather theme over the next 10-14 days will be cooler than normal temps and below normal rainfall. The below normal rainfall pattern will keep soil moisture levels in decline while the coolness limits any real stress for crops.
AgResource’s concern would be if heat were to return while the rainfall trend remains below normal during July? The US weather pattern has been highly erratic since February with some super heat featured over the Western US this week while a several tropical storm systems meander in the Gulf of Mexico. The exact path of these tropical systems will help in determining the early July weather pattern for the Central US. The 1st system should make landfall in the last half of the week across MS/AL/W FL.
The US & EU weather forecast models are in fair to good agreement for the next 10 days. The forecast models have been trending drier/cooler with each new model run since midday Saturday. And now the GFS is drier than the EU model solution! The EU model has been consistently drier since late May, so the new dry GFS look is important in maintaining a below normal rain trend.
The cooler/drier occurs as cold fronts push southward with frequency out of Central Canada, while super and extreme heat holds across the western third of the US into late June. The north to south Central US upper air flow reduces the flow of humidity from the Gulf thereby maintaining a drier trend.
ARC would note that the 6z model run of the GFS model does progress the Western US Ridge into the Central US in the 12-15 day period. Traders will be closely monitoring the midday run to gauge if any Central US Ridging is real? In other world ag markets, Paris September wheat futures are up another 3.25 euro’s/MT to $176.25 while July Malaysian palmoil lost 16 rinngits to close at $2,639/MT. China’s Sept Dalian corn lost 6 cents/Bu to $6.15 while Dalian Sept soymeal gained $3.50/MT to $391.90. The Paris wheat market is rallying as another week of hot/dry weather is indicated which will stress crops.
ARC looks for steady to a 1% fall in US corn/soy GD/EX ratings with spring wheat ratings steady to 1% better following last week’s rain. Unfortunately, the weather forecast offers rather limited rains for the Dakotas into July.
Seasonal corn price trends turn down this week and with funds nearly flat in corn positioning, some pressure is noted this AM. However, one needs to be careful about being too bearish with Midwest soil moisture in decline and the July forecast uncertain. Our advice remains; “Don’t sell breaks or buy sharp rallies!” The downside CBOT price potential is limited until corn silking.
