Really good comments from RJO this morning. If you’re behind plan on selling or protecting corn/bean price vs what we talked about in the Spring the charts are looking very dismal for any kind of significant rally back to $7.00 corn and $15.50 beans prior to harvest. I know no one likes spending money but put options are a great way to  lock in guaranteed revenue if the corn market does continue a seasonal downtrend and that relieves a lot of anxiety if this market starts trending towards $4.00 and $12.00. There’s been support down here around 5.75-5.80, however if we close the week below that, we’re going to need some really bullish news to keep the funds engaged in buying ags.

Current markets at 9:15 am

Corn Sep down 22 @ 5.90

Corn Dec down 24 @ 5.87

Beans Nov down 35 @ 13.43

Wheat Sep down 1 @ 8.12

Wheat July 23 down 4 @ 8.39

Cotton Dec down 124pts @ 91.76

Aug ULSD down 5c @ 3.5975

Aug Crude down 70c @ 101.89

Here are some bullet points directly from Rich Feltes @  RJO this morning:

“Are July lows in or are ag markets trolling for new longs before plunging again to new lows?

Consider the following:

• CZ & SX unable to post new lows for 8 trading days

• CZ & SX getting added chart boost by upside penetration of respective 200 DMA’s

• Crude oil, confident in Biden’s failure to set up Saudi crude oil production, has resumed uptrend by rallying $6.00+/barrel above last week’s low

• CZ & SX summer rallies to date of 85 cents/$1.34 pale vs. much larger rallies posted in the summers of 2011, 2012 and 2013 (CZ +$1.75-$3.00 and SX +$1.80-3.00).

• Russian resolve to press on with Ukraine war despite mounting casualties/cost serves as reminder to trade of critical need for other grain/edible oil exporters to produce and

export large quantities. RoboBanks says “we’re not out of the woods yet”.

• Recent dollar weakness, US job growth and higher than expected US consumer spending may be undermining recession narrative. Macro traders will carefully monitor Q2

earnings updates and accompanying LH 2022 corporate outlooks.

• Most critical 2 weeks of 2022 US corn growing season still ahead. Corn yield declines all but assured across N Delta, MO, KS, NE & CO. IL/IA/WI and MN prospects at least

average while OH/IN stabilize after July rains mitigate June dryness. Analysts in coming

days will home in on more accurate US corn yield assessment by assigning state by

state yield estimates reflecting weather conditions to date.

• Importantly, traders are well aware of shortcomings in GFS/Euro 6-10 day modeling which have repeatedly underestimated following week’s rainfall while over-estimating

temps. We suspect grain markets, after advancing on bullish deferred weather

forecasts, will be reluctant to follow-through on the upside without follow-up

confirmation of extended heat/dryness.

• Persistently above normal US summer temps is the prevailing pattern (helpful to late planted crops but harmful to C Plains/MO/Delta). Statistically, the warmest day of the year is July 21 after which daytime highs slowly cool.

• Bottom line- suspect CZ and SX will range trade in $5.80-$6.40/$13.30-$14.30 respectively as trade monitors weather, demand, macros, cash markets and potential

opening of Ukraine Black Sea grain exports. The longer ag markets are unable to

decisively exceed ranges outlined above—the more likely managed funds will continue

to lighten longs ahead of approaching 2022 row crop harvest.”