Markets are lower this morning with corn and soybeans down 3 and wheat down 5.
Last night’s planting and crop progress report showed the US corn crop 97% planted and 75% in good to excellent condition. Soybean planting progress came in at 86% planted with 72% of the crop rated in the good to excellent category. Some areas of IL and IN that received heavy rains in May are busy replanting and experiencing erratic stands that will be interesting to watch conditions on over the rest of the summer. Unfortunately these areas are too small to have a bullish impact on the market. With old crop corn carryouts expected to be in the 2.1-2.3 billion bushel range in Thursdays report and this years crop off to a great start for the majority of the US prices will struggle.
The funds have been short over 200,000 contracts for close to a month now as they closed yesterday with an estimated 266,000 short position. Some traders believe we will see some short covering in the coming weeks to set up another selling pattern after we get into mid-July to early August. I do not look for that short covering position unless we get a weather issue in the next couple weeks. I look for the funds to hold on to their short position well thru new crop.
Traders will be monitoring rain totals this week from the Tropical storm that is moving thru the central US. After this remain event there is almost no rain in the forecast for the next 15 days with warmer temperatures. This looks to be ideal for growing conditions.
Producers should be making sales of old and new crop corn ahead of Thursdays report and should be making plans to have significant sales on ahead of the July 4th weekend.
Have a Safe Day!