Corn is up 10 and soybeans are up 20 to open the week.
Money movements and positioning ahead of Wednesdays report is going to have the markets bouncing all over ahead of its release. Estimates for the report can be found below. Once the report is past us, we will return to weather trade which can make predicting movements very difficult as forecasts change, and differing forecasts emerge.
The 10-day forecast clears out from the recent wet pattern in the Eastern US. Most rain moves to the South, and the West stays dry. There is not much rain in the forecast for the Central US over the next 14 days. Temps are supposed to heat up in the West.
Crop ratings are expected to be better in this afternoon report as last weeks rains improved conditions. Historically the markets struggle to move higher coming out of the 4th of July weekend. In most years the southern crop is close to tassel and pollination and if we have adequate rain and favorable forecasts (this year’s scenario) traders will assume a short position. I am not sure what will happen this year, but with the southern crop slightly behind its normal pace and so many political factors at play its too hard to predict.
On Friday, the Supreme Court ruled that the Environmental Protection Agency does have the jurisdiction to issue waivers to refiners that had previously not been granted waivers. It does not dictate that waivers be given. This comes down to this Administration as well as future Administrations. The Biden Administration argued before the Supreme Court on this issue last spring on the side of the biofuel industry. However, it also said a couple weeks ago that it was considering ways to provide relief to refineries from the blending mandate which is giving mixed signals. What will happen is unknown, but any political move to reduce blending could dramatically impact commodity prices!
My advice and the safest play would be for producers to have 50-60% of their new crop sold prior to Wednesday’s report. The fact that you can lock in $5 corn for fall delivery and 5.25-5.30 for next spring makes this an easy call for me. If we were to get 94-95+ million acres in Wednesday’s report and forecasts stay favorable this market will sell off fast. (We lost 90 cents in new crop prices over the last two weeks on weather alone)
USDA June 1 US Grain Stocks (million bushels)
|USDA June||Average Estimate||Range of Estimates|
USDA Acreage Report (million acres)
|USDA June||Average Estimate||Range of Estimates||USDA March||Last Year|
Have a Safe Day!