In the grain and oilseed trade, we got a little breather from the relentless selling that’s been so prevalent lately. Wheat managed double digit higher closes in a few contract months, corn was mildly higher and beans were mixed with pressure on new crop and mildly higher old crop closes. Managed money is still at or really close to record short both corn and beans and that’s been a dark cloud looming over grains lately. One could easily make an argument that specs are so heavily weighted on the sell side that downside should be limited from here, but if there’s one thing I’ve learned from the past, it’s that records are made to be broken and sometimes they are broken by a wide, wide swath. Plus, the market went from talking about dryness in the Eastern Corn Belt and flooding in the Western Corn Belt to talking about crop condition ratings not wavering much throughout that stage of the news cycle and now thoughts of trendline yield potential still with a few rumblings of even better. Don’t shoot the messenger and I’m just the messenger, but there’s a lot of bandwagon jumpers that change their outlook every time the wind shifts and like to be drama queens with bold predictions and statements. Unfortunately, the market reacts to that sometimes, so here we are..
Weekly EIA ethanol data showed production jumping 5% from the week prior to a level that wasn’t far off a record. On the flipside of that, blender demand dropped 4% and yet somehow stocks dropped 1.9%. No doubt, there’s a glitch in that data collection process that skews some of these numbers occasionally. Hard to believe production was up so much, demand down and stocks were down as well?? Exports were lower week-to-week also, which makes it even more confusing.
Weekly export sales in the grains were bullish wheat and soybeans, neutral milo and neutral to maybe slightly bearish corn in the old crop totals. New crop sales of the fall crops were good. Old crop totals gave us 17.2 mln bushels of corn sales, 2.4 mln milo, 13.2 mln bushels of beans, which is good for this time of year. Wheat was 21.3 mln bushels and that’s back above Gilpin’s old Mendoza line of needing to be 20 mln+ each week. With wheat ending stocks back up over 800 mln bushels in the latest forecast, we actually do need to see quite a few 20 mln+ numbers in these weekly exports.
New crop numbers were zero wheat, which is to be expected given the fact a new marketing year started for wheat on June 1. New crop corn business was 19.1 mln bushels, 2 mln for milo and 13.8 mln beans. Top buyers in old crop were South Korea in wheat and China was on the buyer sheet for wheat as well. China was #1 in milo and soybeans and Japan was at the top for corn. On the new crop side, unknown destination was the top buyer in beans, but China made the list and that was a long time coming.
Funds yesterday were estimated on the buy side of 4k wheat, 5k corn and 1k beans.
8am daily export reporting showed 510k mt’s of US soybean sales to unknown destination and 150k mt’s of US soymeal to unknown.
Loewen and Associates, Inc.
Pete Loewen / Matt Hines / Doug Biswell / Tyson Loewen
www.loewenassociates.com matt@loewenassociates.com
785-537-3336
IMPORTANT—PLEASE NOTE
This does constitute a solicitation to buy or sell commodities futures and/or options. The information contained herein is provided for informational purposes only. The information is not guaranteed as to its accuracy or completeness, although the information was taken from sources we believe to be reliable. The market recommendations of Loewen and Associates, Inc. are based solely on the judgment of Loewen and Associates, Inc. personnel. We do not guarantee or warranty, either expressed or implied, of success to you in the use of this information. Loewen and Associates, Inc. disclaims responsibility for or loss associated with use of information from our commentary, analysis or recommendations. There is risk of loss in trading commodity futures and options. The risk in trading can be substantial; therefore only genuine “risk” funds should be used.