Good Morning,

The US Midwest weather forecast had no major changes as close to average rains and no prolonged heat looks to continue. A front looks to bring rainfall to most areas of the Midwest thru the first half of next week. The 11-16 day forecast has mostly average to above average temps with average precip for the Midwest.
Informa will release its production/yield estimates this afternoon. Expectations are for their numbers to mirror FC Stones estimates which were released on Wednesday. Right now it appears the markets are trading a 176-178 bpa yield in corn and a 49-51 bpa in soybeans. Look for traders to start gearing up for next Fridays report early next week. The funds are currently short 133k corn and 65k soybean contracts.
Demand for corn has continued to be strong and if prices remain low, the export demand could bring carryout below 2 billion bushels even with a yield of 178. (view chart below).

18/19 USDA June est Projection #1 Projection #2 Projection #2
Planted Acres 89.1 89.1 89.1 89.1
Harvested Acres 81.8 81.8 81.8 81.8
Yield 174 178 183 185
Carry in 2027 2163 2163 2163
Production 14230 14569 14969 15133
Available 16307 16782 17182 17347
Feed Use 5425 5375 5375 5375
Industrial Use 7105 7105 7105 7105
Ethanol Use 5625 5625 5625 5625
Exports 2225 2400 2400 2400
Total Use 14755 14880 14880 14880
Carryout 1552 1902 2302 2467

In my opinion only a yield of 174 or less will move this market higher. The export estimates above in projection 1,2 and 3 are assuming that trade negotiations between the US and our partners gets worked out. China is preparing to retaliate in the escalating trade war on tariffs on about $60 billion worth of US goods. The import tax could range in rates of 5 to 25 percent. The implementation date of the taxation will be subject to the actions of the US. This statement came in response to yesterday’s news that President Trump would like to increase tariffs up to 25 percent.

Have a Safe Day!

Garry Gard