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Grain Comments: 06-11-2024

Good morning.

Another fairly quiet overnight session has been seen so far in the ag markets as Monday’s crop progress report came in mostly as the trade expected, and didn’t offer much in the way of surprises. Both corn and soybeans have started the season at the higher end of the historical range in terms of condition ratings, but Mother Nature will still have the final say on the US supply situation in the 2024 crop year. Tuesday looks to be a choppy day at the CBOT, with traders positioning for tomorrow’s June WASDE report. Corn futures are trading 1-2 cents higher, soybean futures are trading 2-3 cents lower, and the Chicago wheat market is up 2-3 cents. Products are mixed, soybean meal is trading either side of unchanged, while soybean oil is trading 20-30 points lower. Outside markets are also mixed, crude oil futures are down 20-30 cents/bbl following yesterday’s sharp rally, the Dow Jones index is down 150 points, and the US$ index is up 20 points. The gap on the June US$ index chart from yesterday’s open remains unfilled as of this writing.

Monday afternoon’s crop progress update showed soybeans started the season at 72% in the good/excellent category. This was right on trade expectations, and the fourth best initial rating for the soybean crop all-time. Corn was rated 74% g/ex, down 1% from last week, and winter wheat was rated 47% g/ex, down 2% from last week.

At the state level, the highest soybean crop condition ratings are seen in Louisiana (83% g/ex), South Dakota (80% g/ex), Nebraska (79% g/ex), and North Carolina (77% g/ex), while the worst rated states are Kentucky (63% g/ex), Missouri (64% g/ex), and Tennessee (65% g/ex).

Corn planting was seen 95% completed as of Sunday, up 4% on the week, while soybean planting advanced by 9% to 87%. Spring wheat seeding was seen at 98%, up 4% on the week.

Along with tomorrow’s latest Fed decision, financial markets will also be driven by the release of the monthly CPI report and monthly inflation data for May, also due out Wednesday. May inflation is seen rising 0.3% in May, which would be the same increase as was seen in April.

Spot crude oil futures had their best one-day gains on Monday since November of last year as traders piled back into long positions following last week’s sell-off. Direction the rest of the week will likely hinge on Tuesdays OPEC market outlook report, as well as monthly data from the International Energy Agency on Wednesday.

Speculation has been swirling regarding the future of French President Emmanuel Macron, with sources close to the President denying reports yesterday that Macron had been discussing a potential resignation. French bonds saw their worst day since 2020 on the rumors.

The Corn Belt was mostly dry on Monday, save for Western areas of Nebraska and the Dakota’s where scattered showers producing rainfall totals of 0.1″-1″ were seen. The Eastern half of the US was cooler/much cooler than average, with night-time lows dropping into the 40’s as far South as Southern IL/IN.

Cool air does not hang around though, as warm air from the West spills over into the rest of the country by Wednesday, when highs return to the 90’s for most of the Corn Belt.

Otherwise, forecasts for the next week are mostly unchanged from yesterday’s runs. The GFS continues to be wetter in the Northern Plains/Canadian Prairie than the EU model, while both are having troubles forecasting the exact timing/location of a tropical storm coming out of the Gulf in the next week-10 days.

Week-two forecasts are wet for the North and the South but offer a period of dryness through the mid-section of the country. Confidence beyond five days remains low.

South America again trended wetter overnight, with Southern Brazil into Argentina wet over the next 10 days. Temps will be significantly above average for the rest of this week, before moderating slightly in the 10-day period. Temps beyond this week will still be above average.

And the EU model continues to be wetter for Russian wheat areas than the GFS model, but otherwise there is little change from yesterday’s runs. Temps continue to be seen much above average.

Have a great day.

 

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