BQC Afternoon Comments For June 27

Geopolitics: The US and Israel are in negotiations to send eight Patriot missile defense systems from Israel to the Ukraine. The Biden administration is looking at lifting ban on US military contractors deploying to Ukraine with intent for this personal to help Ukraine repair US-provided weapons systems.

Macroeconomics: US dollar was easier today while stocks were mildly higher ahead of tomorrow’s key PCE Price index. Today’s data was soft with durable good orders down from last month, wholesale inventories up from last month, and pending home sales down 2.1% month on month. Unemployment claims came in at 233k down from last week’s 239k. Feb speak has inflation moving in the right direction with a rate cut now likely in the fourth quarter and a pencil of four 25 bps cuts for 2025.

Ag Fundamentals: Markets today were about cleaning up July longs ahead of tomorrow’s first notice day. July corn ended the day back were March futures were on March first notice day. July beans are trading just above where May futures were at end of April. Minneapolis July is well below May first notice values but did post it’s second consecutive higher close for the first time since May 23 and May 24 market top. Tomorrow’s acreage report has trade looking for planted corn acres at 90.3 million vs. 90.0 in March. High side is 91.3 million but I have heard talk could be as high as 92 while some what to say private estimates will come in below the 89.0 low estimate. Planted bean acres are estimated at 86.75 million vs. 86.5 in March. High estimate is 87.5 while low is 85.5. There will be PP acres in the northern plains, whether than were counted in June 1 survey or ended up being corn PP will probably not be know till October. Spring wheat acres are estimated at 11.34 million up slightly from March intentions of 11.335 million. Today’s Stats Canada acreage was down slightly for spring wheat so would concur with trade expectations.

Weather: 5-day forecast is predicting 1 3/4″ rains from Canada border down to Missouri covering all of Minnesota and Iowa. Rains are lighter to the east but not absent. Temps across the northern plains to stick to the 70s through the 5-day outlook and will spread eastward easing high temps by early next week. 6-10 day looks near ideal with any heat holding to the southern edges of the corn belt which keeps the rains over the heart of the corn belt: IA, IL and IN.

• July corn closed at $4.13 3/4 filled a July chart gap dating back to January 2021 and closed just below the settle of March futures on first notice day at end of February.
  • Any farmer that rolled basis from March to May to July and pushed out again to September has a lot of ground to make up.
  • Preliminary volume in July corn futures today was 137,993 contracts, down from yesterday’s 161,453.
  • Prelim volume in the July/Sept spread was 104,062 contracts, up from yesterday’s 85,152.
  • There will still be a lot of old crop corn to price before September first notice on August 30.
  • Weekly corn export sales coming in at low end of estimates did not offer much support either. While on pace are not enough to grind through our 2.0+ billion bushel carryout.
• July beans beans closed a few cents above where the May contract settled on April 30 and closed lowest since May 1.
  • Preliminary volume in the spreads, both N/Q and N/X, were down from yesterday.
  • Prelim volume in the July futures was also down from yesterday.
  • Volume in November futures was also down from yesterday.
  • This suggests more liquidation of positions rather than new open interest.
  • Weekly export sales offered little support with again – no new crop sales to China.
• Wheat held support and closed higher after trying to trade higher yesterday.
  • Unlike corn and beans seemed to suggest wheat is starting to uncover a little fresh demand.
  • Chicago July wheat traded back to near April 18 lows this week.
  • KC July traded back to its April lows on the continuous charts.
  • While Minneapolis July traded lowest since Dec 2021.
  • Weekly export sales were best since week of January 11. Sales totaled 24.51 million bushels vs. average weekly pace of 11.94 million. Sales to date are 50% ahead of last year while USDA estimates sales to increase 11% yoy.
• Tomorrow is d-day. Acreage and Stocks reports at 11 along with month-end and quarter-end.
  • December corn is down 33 1/4-cents for the month and is down 44-cents for the quarter.
  • November beans are down 52 3/4-cents for the month and are down 53-cents for the quarter.
  • September Minneapolis wheat is down $1.31 3/4 for the month and down 43-cents for the quarter.
  • Markets are extremely overbought but weather is still favorable with condition ratings implying potential for better yields.