This week’s action:
Corn Sep down 92 at $4.89
Beans Sep up 40 at $13.54
Fats August up 6.00 at $176.925
Feeders August up 13.00 at $247.30
Hogs July up 3.575 at $95.70
Corn Dec23 down 89 at $4.95
Beans Nov23 up 39 at $13.43
KC Wheat Sep23 down 67 at $7.93
Corn Dec24 down 36 at $4.97
Beans Nov24 down 28 at $12.09
KC Wheat July24 down 58 at $7.63
Seasonal Averages:
Dec corn Feb 1- today: $5.56
Nov beans April 1- today: $12.57
Market Recap:
The corn market experienced continued pressure this week from friendly forecasts and precipitation in key area. New crop corn is now down $1.35 in just 7 trading days from the $6.30 level on June 21. The nail in the coffin occurred Friday after the June 30 planting and stocks report. USDA reported 94.1 million acres of corn planted (over 2 million more than expected). This is the 3rd highest corn acreage number since 1944.
“All Crops” acreage is the highest since 2018.
Just on Friday alone, Dec23 corn closed 33 cents lower at $4.95. New crop soybeans rallied 77 cents Friday to close at $13.42.
Since June 12:
Dec23 corn
- Rallied from $5.30 to $6.30 in 7 trading days
- Pulled back from $6.30 to $4.95 in 7 trading days
Nov23 soybeans
- Rallied from $12.10 to $13.77 in 6 trading days
- Pulled back from $13.77 to $12.60 the next 5 trading days
- Rallied from $12.60 to $13.43 the next 2 trading days
Sep23 KC Wheat
- Rallied from $7.80 to $8.90 over 5-7 trading days
- Pulled back from $8.90 to $7.90 the next 7 trading days
The soybean market reacted violently to the upside post report. Let’s dig into the numbers as to why:
June WASDE
87.5 million acres planted with 86.7 million acres harvested
86.7 million x 52.0 (trend yield) = 4,510 billion production
Forecasted carryout was 350 billion bushels
If we remove 4 million acres x 52.0 bpa = 200+ million bushel production loss
Assuming uses/exports stay the same, we are now getting close to a sub 100 million carryout (extremely tight)
On the corn side…
June WASDE
92.0 million acres planted with 84.1 million acres harvested
84.1 million x 181.5 (trend yield) = 15.265 billion production
Forecasted carryout was 2.257 billion bushels
If we add 2.1 million acres x 181.5 bpa = 381,150 production increase
Assuming uses/exports remain similar, we are approaching 2.6+ billion bushel carryout (extremely comfortable)
*This allows for USDA to lower yield in July WASDE
Obviously, final yields will be a moving target, but this is the information the market is currently digesting.
Forecast:
Solid rain amounts were seen across much of NE, the southern ½ of IA, the central 2/3 of IL and the southern ½ of IN over the last 24-48 hours. Excessive winds and some hail damage was reported in areas. Overall damage is likely limited (localized) with the main concerns around the NE MO/IL border. The GFS sees good additional amounts for mostly the same areas, with the addition of OH, through the weekend, but limited amounts for the Dakotas, MN, and WI. The Euro is in good agreement for the weekend event, with additional rains to follow next week as well.
Economy:
The S&P 500 continues its steady recovery from last October’s lows. The index has rallied over 20% and closed the week at its highest value since April 2022.
Is the AirBnb movement hitting rougher seas for real estate investors? Revenue per available listing in Phoenix was down 48% May-over-May. There are over 20 markets in the US with yearly revenue declines of 40% or more. This as 30-year mortgage rates are back above 7%.
It was reported more than $200 billion in Covid aid disbursed by the Small Business Administration may have been stolen by ineligible businesses. This is about 17% of the $1.2 trillion disbursed.
Something that probably means nothing:
25% of 40-year-olds have never been married. In 1980, it was just 6%.
Quote of the Week:
“The people curse him who holds back grain, but a blessing is on the head of him who sells it.” – Proverbs 11:26