Wet weather prevails across the Midwest, our weather market has commenced. Despite a great start to the planting season, continued rain in the southern corn belt has delayed soybean planting and wheat harvest. The unsettled, wet weather pattern looks to persist for the immediate term, which has caused crop condition ratings to fall. The falling ratings along with delayed wheat harvest has pushed prices higher for the week. Old and new crop futures in both corn and soybeans enjoyed significant gains this week. For the week, corn was up over $0.30 while soybeans rose nearly $0.45.
The price rally was just what the farmer was waiting for, enough to pull stocks out of storage and into the supply pipeline. End users were seemingly flooded with new grain purchases this week, which was clearly reflected by in the falling basis levels. Thus far, old crop basis has taken the brunt of the damage, especially in soybeans. With ample old crop supplies in the country, end users are unwilling to pay one cent more than necessary for the next bushel purchased. Enough questions remain around new crop acreage and production that basis levels there are holding steady. We will get a better idea of those figures on Tuesday when the USDA releases the June 1st Stocks in all positions and Planted Acreage reports.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Another quiet week for grain markets this week, punctuated by the much anticipated, yet highly mundane, June USDA Supply and Demand report. Very few changes were made the balance sheet. Corn carryout increased in both the old and new crop years thanks to a 25 million bushel decrease in 2014/15 ethanol production. Soybean carryout dropped 20 million for 2014/15 and 25 for new crop. This was done through increases in crush and exports.

In general the market is focusing on weather and ample stocks, driving prices lower. The old adage “rain makes grain” is also feeding the bearish sentiment. Brief rallies in corn were typically the result of short covering and concerns of too much rain in parts of the corn belt. Soybean gains have been short lived as 330 million bushels is more than enough to get through to new crop. However, bean basis is seen as steady to slightly firmer, margins and crush rates remain strong in the near term. Widespread bird flu outbreak has not yet made a significant impact on demand.

Our next opportunity for significant market direction will be the June 30 acreage report from the USDA. Many questions should be answered by then. Did more corn get planted in the early planting window we saw this year? Did late spring rains prevent all the intended bean acres from being seeded? Will the “missing” acres from the total acreage pie be found? Until then, we will likely see sideways trade with any rally a function of non-fundamental forces.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Markets this week can best be described as a roller coaster ride, usually following the US Dollar index. As the macro economic picture gyrated throughout the week, fluctuations in the US Dollar index forced quick changes in the commodity space. For the week, both corn and soybeans closed with gains. From a fundamental standpoint, there is little reason for commodities to rally, but they seem to be showing some strength all the same. Crop conditions show no concerns at this point in the growing season. Now the market waits for the next round of USDA reports, starting with Supply and Demand on Wednesday. Early guesses are for the soybean carryout to drop slightly while corn carryout is estimated to increase a little. Export sales appear to be slow and behind pace, leading to the projected higher corn carryout. Soybean demand on the other hand, continues to stay robust, dropping supplies slightly. June 30th, we will get the official final planted acreage. This will serve to fuel the new crop supply debate more, particularly in soybeans. Current estimates are for 84.8 million acres of soybeans, but many in the trade look for that to jump dramatically, thereby increasing soy carryout . Without a major increase in demand, burdensome supplies are likely to remain.
On the cash front, corn basis has backed off slightly while the board has enjoyed the minor rallies. Soybean basis has shown little to no signs of weakness. With eastern corn belt processors are rumored to be paying nearly $10.00 cash, it leads some to question the accuracy of current soybean carryout figures. We will all be wiser on Wednesday when we see the latest numbers from the Feds.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.