** Continued weakness is the story at the CBOT this AM as July corn pushes below trendline support at $3.66 while soybeans sag on non-threatening Central US weather. Wheat prices are down on technical selling and a correction of the recent rally. The volume of CBOT AM trade is much reduced from prior days with traders not inspired to take on new positions. US farm sales have slowed and fund managers will have to keep selling if CBOT prices are to continue their decline. Wheat continues to have the bullish fundamental story, but the market had become overbought and a correction was needed. ARC continues our advice of recent weeks; “Don’t buy strong rallies or sell strong breaks”.
** CBOT floor brokers report that funds have sold 7,000 contracts of corn, 3,000 contracts of wheat and 6,000 contracts of soybeans. In soy products, funds have sold 2,000 contracts of soyoil and 2,700 contracts of soymeal.
** US weekly export sales for the week ending June 15th were; 19.9 Mil Bu of wheat, 20.8 Mil Bu of corn, and 4.1 Mil Bu of soybeans. For their respective crop years to date, the US has sold 276.5 Mil Bu of wheat (up 19.7 Mil Bu from last year or 8%), 2,171 Mil Bu of corn (up 334 Mil Bu or 19%) and 4.1 Mil Bu of soybeans (up 336 Mil Bu or 18%). The US soybean and meal sales pace slowed from recent weeks while US wheat continues to capture world demand.
** Egypt’s GASC secured 175,000 MTs of Ukraine and Romanian wheat at prices that range from $190.13-195/MT. Russian fob wheat prices are holding steady and the dispute over ergot in imported Egyptian wheat has everyone wondering what will happen next in Cairo?
** The Argentine peso is sitting just below a record low which is keeping pressure on their fob offers of Argentine corn/soy products. Argentine corn for July is offered at 2 over Chicago – a record low and testament of their large exportable corn surplus and the new found currency incentives offered to producers. The US corn export opportunity is in retreat as both Argentina and Brazil are offering fob corn cheaper than the US well out into October.
** Hot/dry weather is starting to adversely impact the 2018 Ukraine corn crop and their exportable surplus? Ukraine is forecast by WASDE to export 20.5 MMTs of corn during the 2017/18 crop year on a crop of 28.5 MMTs. Most Ukraine crop watchers now peg the Ukraine corn crop at 26 MMTs, which would reduce exports by 1.50-2.0 MMTs. Ukraine weather is even hotter looking to next week.
** The Central US weather forecast is nonthreatening into July 4th. But there are 8-10 weeks of very important weather ahead for crops. The US weather pattern has been highly erratic. June ended up being much drier than anyone expected after a record period of wetness/cool temps in late April and early May. Calling the long range forecast beyond 2 weeks has been nearly impossible.
** Midday GFS Weather Update: Rainfall totals associated with the remains of tropical storm Cindy are reduced at midday to .5-2.00”, down about 1.00” from what was offered overnight. The Midwest forecast is little changed as a front sweeps southward producing .25-1.00” in the next 24 hours. IA, IL and MO rains will be less in a range of .1-.7”. Mostly dry weather follows with the next chance of rain being Wednesday/Thursday. A front sweeps eastward producing an initial few spits of moisture over the N Plains, but the rainfall totals are boosted to .4-1.00” with a secondary system. This system weakens over the W Midwest and C Plains, but its slow movement produces rains of .5-2.00” across IA/NE KS and N MO with .25-1.50” to the east. The 11-15 day offers additional rain and continued mild temps.
** AgResource Market Comment: July corn could decline to the next level of support at $3.55-3.60 while July Chi wheat targets $4.60. July option expiration is Friday and unless there is a dramatic change in the forecast, nonthreatening weather looks to persist into July 4th across the Central US. The bull story is hard wheat while is too early to make any judgement of US soy yield potential – or the last half of the summer Central US weather pattern.
** 10 Day GFS Rainfall Forecast:
