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Grain Comments: 06-10-2024

Good morning.

Markets at the CBOT are mixed/quiet to start the new week. Ongoing themes remain mostly the same, with the USDA’s June WASDE report due out on Wednesday to offer some tradable data at mid-week. The report isn’t likely to show anything Earth-shattering on the US balance sheets, but traders are interested to see if the USDA can tighten old crop ending stocks just a bit to make carry-in stocks for 2024 slightly smaller. Otherwise, it looks to be another week of watching weather forecasts and trying to get a gauge on US crop potential in the 2024 season. Corn futures are trading 2-3 cents higher, soybean futures are trading 1-4 cents higher, and the Chicago wheat market is down 5-6 cents. Products are mixed, soybean meal is up $1-2/ton, and soybean oil is down 5-10 points. Outside markets are mixed, crude oil futures are up 50 cents/bbl, the Dow Jones index is down 50 points, and the US$ index is up 40 points. The $ index gapped higher to open last night and is currently some 220 points off its lows from Friday.

Friday afternoon’s CFTC commitment of trader’s report showed heavy fund selling in the week ended June 4th; fund traders were sellers of 79,230 contracts of corn, sellers of 45,524 contracts of soybeans, and sellers of 6,253 contracts of Chicago wheat.

The selling in corn was the largest in a single week since the week of May 2nd, 2023, and brings the fund net-short position to a new five-week high. Funds are now seen net-short 212,706 contracts of corn, net-short 59,741 contracts of soybeans, and net-short 31,684 contracts of Chicago wheat.

In soy products, funds were combined net-sellers of meal and oil for the first time in seven weeks; funds sold 17,584 contracts of soybean meal and sold 15,854 contracts of soybean oil. Managed money is now net-long 100,699 contracts of soybean meal and is net-short 57,690 contracts of soybean oil.

As of June 3rd, 62% of the French soft wheat crop was rated good/excellent. This was up 1% from the previous week but was down 26% from the same week last year.

NOPA on Friday revised its April US soybean crush estimate to 169.436 mil bu’s, up from its previous estimate of 166.034 mil bu’s. The revision makes the April crush figure the lowest since last September and was made due to inaccurately reported processing data out of Indiana according to the group.

Argentina’s oilseed union SOEA said Friday its workers would again be striking to protest a proposed labor reform backed by the Milei administration. The strike is set to begin as soon as the bill hits the Senate floor for debate, which is slated for June 12th (Wednesday).

Analysts at private Ukraine ag consultancy APK-Inform estimated grain harvest in the 2024 season to be down 12% from last year at 52.76 mmt’s. This is in line with the current ag ministry estimates of 52.4 mmt’s.

Russia’s ag minister Oksana Lut said over the weekend that Russia will not experience difficulties in grain exports due to Turkey’s wheat import ban. He added Russian exporters needed to reallocate an estimated 3 mmt’s of wheat.

China’s Ministry of Ag and Rural affairs on Sunday said China’s sow herd totaled 39.86 mil head at the end of April; this was down 0.1% from the last quarter, and down 6.9% from last year. The number of pigs slaughtered in April was up 2.3% from last year at 109.38 mil.

US federally inspected beef production in the week ending June 8th was up 13.7% from last week at 522 mil lbs., while pork production was up 12.3% at 521 mil lbs. YTD beef production is down 1.7% from last year, while pork production is up 0.6%.

US equity markets this week will have their attention turned to the Federal Reserve’s June policy meeting, which begins tomorrow and will wrap up on Wednesday.

Traders see little chance for a rate cut at this meeting, but as has been the case in recent months, will be closely listening to Fed Chair Jerome Powell’s post-meeting press conference to try and procure any hints on future policy decisions.

Stocks in the EU and France have started the week softer as an expected rightward shift in the EU Parliament following a four-day election prompted French President Emanuel Macron to dissolve parliament and call a snap election.

Weekend weather saw rains of generally 0.1″ to 2″ across the Southern Plains and into CO/NM. KS and MO saw good rains as well, with some local areas receiving upwards of 5-6″. The far Northeast was also wet.

Things look to be mostly dry across the Corn Belt to start this week, with a system seen bringing rain to the North at mid-week. Florida also looks to receive some scattered moisture at mid-week, which will be welcome.

Temps will be cooler in the East today and tomorrow, before warm air from the Western ridge covers most of the country by mid-week. Models are then seeing cool air return to the Pacific Northwest, which would be a good summer development for US producers. The forecast remains non-threatening coming out of the weekend.

Models continue to have disagreement on rains for the Russian wheat belt; the EU is still seeing scattered shower chances for areas East of the Black Sea in the next 10 days, while the GFS is further South with the moisture. Temps here continue to be well above average.

South America trended wetter over the weekend for flood-hit areas of Rio Grande do Sul in Southern Brazil in the 10-day period. Temps also trended warmer in both the 5-day and 10-day runs, as seasonably warm air stocks around for another week.

Have a great day.

 

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