BQC Morning Comments For June 28

Macroeconomics: Macromarkets shrugging off last night’s debate. Not sure there was a winner but the Dems are in panic mode over selecting President Biden as their Presidential candidate. PCE Price Index was up 0.1%, in line with expectations and down from last months 0.3%, which was revised higher by 1%. US dollar is nominally lower. Crude is nominally higher. Gold is up modestly. Equity futures all point to higher start.
Ag Fundamentals: Deliveries for first notice day were mostly in line with expectations. There were 744 contract put out in corn coming from ADM house. Stoppers were scatters but Marex taking 117 and RJO taking 183 may find their way into commercial hands. There were 1,129 contracts delivered vs. the Chicago wheat contract with Dorman customer issing 1,000 of those receipts. SocGen was the stopper of 953. There were no deliveries vs. the KC contract. In Minnneapolis wheat, CHS customer put out 415 certs with Wells the stopper of 352. There were no deliveries vs. the beans or meal. There were 1,137 contracts issued in bean oil with ADM house stopping 877. And for my oat traders, there were 39 deliveries with takers scattered on the street.
Weather: This morning’s 5-day precip forecast moved the heaviest precip out of MN and east into WI. Rains still stay over IA and across northern IL, IN and OH. Dryness sticks to the SE. Temps remain cool to the north and warm for the rest of the corn belt but no extreme heat forecasted in the near future. Weather looks favorable and non-threatening through key July 4 holiday.

Reuters News’ Karen Braun put together some interesting statistics on the June acreage report:

• USDA’s June soybean acres number has been outside the trade’s range of estimates in four of the last five years.
  • Range for today’s report is 85.5 to 87.5 million.
• USDA’s corn acreage number has been outside the range of trade estimates three of the last five years.
• June soybean acres have been below the average trade estimate for nine consecutive years.
  • Today’s the average estimate is 86.753 million vs. March’s 86.510.
  • Guesstimates have missed the mark by at least 1% since 2019. 1% equals 867,530 acres for 85.885 million acres.
• Average corn estimate has been above USDA’s June acreage number 6 out of the last 10 years with biggest misses in 2019 and 2020 delayed planting years.
  • Last year trade was 2.4% too low, a year with no delays.
  • Average trade estimate for today’s report is 90.353 million vs. 90.036 in March.
• June soybean planted acres have been up 11 times and own 12 in the past 24 years when compared to the March intention report.
  • In 11 years higher, the average increase has been 1.07 million.
  • In the 12 years lower, the average decrease has been 1.73 million.
  • Last year June acres were 83.5 million vs. March intentions of 87.5. Final acres were 83.6 million.
• June corn planted acres have been higher than March intentions 17 years out of the last 24 years.
  • If acres are higher in June, they are up an average of 1.17 million.
  • If acres are lower, they are down an average of 1.15 million.

Last year March corn intentions were 92 million with June acres at 94.1 million. Final acres were 94.6 million.

Export & World News

Saudi Arabia seeks 595,000 MT of wheat. French wheat is rated 60% gd/ex down from 62% last week and 81% gd/ex a year ago.

• Malaysian palm oil futures closed higher for the day and for the week. This was first higher weekly close in four weeks as concerns of slowing production offered support.
• Chinese Dalian futures closed mostly higher with exception of corn.

French milling wheat futures are trading higher this morning.