Market Commentary  07/01/20 3:44:16 PM Printer Friendly VersionPrinter Friendly Version


Corn futures closed stronger for the 3-straight day as the funds continue to cover shorts. September corn has gained 31 ¼ cents this week. Funds were estimated buyers of another 30,000 contracts today, which would mark a total of roughly 100,000 contracts of net buying this week. An old rule of thumb was that funds typically buy in 3-day intervals, so we will see if this can be extended tomorrow. The acreage report yesterday helped extend the rally, with corn trading over the 100-day moving average today. The 5 Mln. drop in corn acres from the March intentions report certainly doesn’t tighten the new crop balance sheet, but stocks still look comfortable assuming decent weather the rest of the growing season. The near-term forecast is warm and dry with little rain expected through the Midwest until the 2nd week of July. This forecast, along with the pending 3-day weekend, will keep futures jumpy over the next few days. The ethanol report showed production up for the 9th straight week. We estimate that 92 Mln. bu. was used for ethanol production last week. Ethanol stocks were down again, this time dropping by 870,000 barrels to 20.164 Mln. barrels. This was the 10th straight week of a decline in ethanol stocks, and the lowest total since early 2017. Export sales will be out tomorrow. Reminder that the grain markets close early tomorrow and there is no trade on Friday. The new USMCA trade agreement officially began today.

Soybeans closed higher again today, marking a positive close each day this week. Funds continue to add to their net long position with August beans now up 31 ½ cents for the week. The acreage report yesterday did not show as big of an increase in bean acreage as the trade feared. Bean planted acreage increased by about 300,000 acres over the March number, while the average guess was looking for a 1.5 Mln. acre increase. The quarterly grain stocks report showed bean stocks coming in near expectations. The USDA will update the balance sheets on July 10th, with old crop bean stocks expected to be near unchanged. Old crop corn stocks should be higher. It is all yield now for the markets with a warm and dry period approaching. Potential rainfall coverage and totals for the middle of July will be closely watched as the markets come back from the long weekend. Oilseed and corn crushing for the month of May will be released this afternoon. Export sales are out tomorrow morning. There have been no export sales flashes this week.

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