** The CBOT will be closing at 12 Noon CDT today for the July 4th US Holiday. ARC will produce a noon wire today, but we will not produce a PM research wire. The CBOT reopens on Wednesday morning at the 8:30 AM CDT. The NASS crop weekly condition/progress report will be released Wednesday afternoon.
** Sharply higher has been the morning with CB0T corn, soy and wheat futures posting solid gains. The rally has been largely based on Central US weather forecasts being warmer/drier, and the concern for crops in the Plains and the NW Midwest. July is the month that makes or breaks corn and traders are well aware of this fact. ARC as of today would not argue for a sharp decline in US corn or soybean yields, but if the weather forecasts are correct, yield trends are down, not up and that is the key with funds holding a record short in soybeans. A sharply higher close is expected at 12 Noon with funds continuing to pare their record large net short position in soybeans.
** CBOT brokers estimate that funds have been net buyers of; 17,000 contracts of corn, 9,000 contracts of soybeans and 7,000 contracts of wheat. In soy products, funds have been net buyers of 6,000 contracts of soymeal and 5,500 contracts of soyoil. There has been some active buying of cash meal according to crushers with prices rising and concerns building on Central US weather.
** The USDA reported that for the week ending June 29th, the US exported 43.1 Mil Bu of corn, 9.8 Mil Bu of soybeans, and 18.6 Mil Bu of wheat. The corn export total was above trade guesstimates.
** For their respective crop years to date; The US has exported 1,914 Mil Bu of corn (up 536 Mil Bu or 40% from last year), 1,928 Mil Bu of soybeans (290 Mil Bu above last year or 18%), and 102.3 Mil Bu of wheat (up 18.7 Mil Bu or 22% above last year). ARC maintains that WASDE should raise their estimate of 2016/17 US soybean exports by at least 25 Mil Bu.
** The USDA reported in its daily reporting system that the US sold 114,300 MTs of corn for delivery to Mexico (of the total 22,860 for 2017/18 and 91,440 MTs for 2018/19 crop years). There also was 120,650 MTs of soymeal to Mexico in 2017/18 and 2018/19 crop years and 140,000 MTs of wheat to an unknown destination for the current crop year.
** Algeria is tendering for at least 200,000 MTs of wheat following a weekend devaluation of their currency. The currency devaluation will likely cause traders to raise prices amid the new uncertainty.
** US and South American farmers have been sellers, but not large cash sellers on the CBOT rally as the wheat market soars on the concern for protein supplies. Farmers appear to be more measured in their future selling ideas.
** Midday GFS Weather Model Update: The midday GFS is similar to the overnight forecast for the next 10 days . The model expands a high pressure Ridge across the Intermountain West and nudges the mean position of this Ridge into the W Midwest at times. Confidence in the details of the forecast are improving, but a tropical storm late in the 14 day forecast makes the last few days of the model run less certain.
High temps will reach the lower to mid 90s as far east as MN/W IA/NE/KS. The E Corn Belt will be more temperate. A NW upper air flow should help storm systems develop across the OH Valley, but areas farther west will stay in a drier than normal profile. The projected 11-15 day period maintains a Ridge/Trough pattern across the US with some progression of the long wave features.
** AgResource Market Comment: No new sales are advised as less than favorable weather invades the Central US with the drought across the N Plains likely to expand south and east into the last half of July. Fund managers are now chasing the CBOT higher and will likely have to get to flat position in soybeans before a top is reached. This is now a full fledged weather pattern and key will be the forecast come Wednesday AM. The market is quickly adding considerable weather premium.
** GFS 5 Day Rainfall Estimate:
