7.1.22 Market commentary

 

This week’s action:

Corn September down .625 @ $6.1950

Corn December down .66 @ $6.07

Beans August down .15 @ $15.10

Beans November down .295 @ $13.95

KC Wheat July down .8325 @ $9.0975

Aug Feeders up 1.625 @ $174.000

Aug Fats up 1.28 @ $134.600

Aug Hogs down 3.92 @ $102.900

Aug Crude up 1.20 @ $108.26

 

Seasonal Averages:

Dec Corn (Feb 1 – June 30): $6.79

Nov Beans (April 1 – Today): $14.99

July KC Wheat (since Russian invasion): $11.23

 

Weekly Recap:

Wrap up notes from Richard Feltes, Head of Market Insights at RJO: World entering 5th month of Ukraine war with corn and wheat well off March/April highs while Nov Soybeans off $1.60 from early March highs. Ag importers are getting what they need (admittedly at higher prices) while alarmist warnings of mass starvation have failed to materialize. The focus next week will be on weather which as of latest forecasts suggest timely pre-pollination rains across many Midwest areas. Remember that trend Corn/Bean yields don’t require perfect weather everywhere but enough favorable weather in key states to offset poor crops in other states. Summer rallies in Corn and Beans are common but given already elevated price levels and macro headwinds facing ag markets – we suspect remaining managed fund longs will be more active sellers on rallies while end users play seasonal odds by waiting until Q4 to extend forward coverage.

The June 1 grain stocks were in line with the average trade guesses.  On planted acres there was an increase of 430,000 acres from the March report on corn and a decrease of 2.63 million acres in beans.  All wheat acres were lowered by 260,000 from the March report.

To note a couple from March to June report Corn planted acres:

MN +500k

ND -600k
SD -300k

WI +300k

 

Something that probably means nothing:

An analysis of USDA Stocks & Seedings Data, from 2016 – 2019 the average of all crops (including CRP) was 335.81 million acres. The average from 2020-2022 of all crops (including CRP) was 330.66 million acres. High being in 2016 of 337.761 and low in 2020 of 331.623.

Forecast:

The GFS at midday is drier in IL, IN, & KY next week, with high pressure ridging projected to be more expansive. Needed rainfall will impact the Dakotas, MN, IA and Great Lakes regions. Cumulative precip of 2-3” remains possible in far northern IL and northern IN, but a wide swath of the principal corn belt faces ongoing net soil moisture loss into mid-month.