** 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.
** 6:30 AM CST CBOT Prices: November soybeans are up 20.25 cents at $9.75, December corn is up 5.25 cents at $3.9725 while September Chi wheat is up 12.00 cents at $5.3775.
** AgResource AM Grain & Oilseed Comment: Good Morning! Sharply higher has been the start of the July 4th holiday week CBOT trade as Central US weather forecasts offer mostly dry weather. The weekend featured less than projected rainfall and a high pressure Ridge will be anchored in the Intermountain West into mid July. A high pressure Ridge in this position will shunt the mean position of the US jet stream northward and produce a mostly dry weather trend for the Central US. This dry/warm trend has the marketplace quickly adding weather premium back into to price following a drier than normal June.
CBOT soybeans have gained 50 cents/Bu and corn has gained 20 cents in the past 2 trading sessions. Friday’s USDA Stocks & Seeding report did not offer any big bearish surprises which has allowed traders to totally focus on Central US weather and 2017 US corn, soybean and wheat yield prospects.
Friday’s CBOT open interest data reflected a 5,667 contract decline in corn, a 4,960 contract decline in soybeans, and a 6,980 contract gain in wheat. ARC notes that funds were holding a record net short soybean position as of last Tuesday, while they are likely entering into their 1st net long position in wheat in over 2 years.
US weekly export inspections for the week ending June 29th are; 18-21 Mil Bu of wheat, 35-39 Mil Bu of corn, and 9-13 Mil Bu of soybeans.
The major weather forecasting models are in good agreement that an amplified high pressure Ridge will set up across the Intermountain West, and from time to time, nudge into the N Plains and the W Midwest. This will allow for some intermittent heat and generally a dry weather trend. ARC notes that this is not a totally dry forecast, there will be some rain chances centered on the Ohio Valley and the SE US – areas that are the farthest away from the high pressure Ridge. Rainfall chances in the N Plains and the W Midwest are more limited. And high temps will range from the mid 80’s to the mid 90’s here.
The 11-15 day extended forecast has also gone drier/warmer with both the EU and GFS models keeping Central US heights aloft elevated and the jet stream across Canada. The drought across the N Plains looks to be spreading south and east with time and causing concern for US corn and soybean yields.
ARC looks for a steady to a 2% decline in US corn/soybean GD/EX conditions on Wednesday. The lack of rain across the N Plains, NW Midwest and portions of Central IL is producing stress on corn and soybeans.
It’s a full-fledged Central US weather market with funds uncharacteristically caught in a record short soy position! Until there are better Plains and W Midwest rain prospects, no new sales are advised.
