We are fully entrenched in a weather market, compounded by negative outside markets.  Weather looks promising for crop development in the near term so markets will want to trend lower until a threat appears.

The surprise vote by Britain to leave the European Union put the world in a tailspin, driving financial markets sharply lower, the US Dollar index sharply higher and grains sharply lower.  As the day wore on, corn was able to claw its way back from down 14 to close down just three and a half.  Soybeans closed toward the lower end of the day’s range.

The outside markets had control today, but the relatively strong performance of corn at the end of the day gives just enough hope that fundamentals will gain some influence once again.  Our next look at new fundamental information comes, Thursday with the quarterly Grain Stocks and Planted Acreage.  Current estimates show corn acres down less than 1 million acres while bean acres will increase 1.5 million.  This alone could give corn a renewed boost to offset this week’s massive sell off.  While we are not likely to see any adjustment to projected yields, many in the trade feel yield reductions are imminent.  July’s crop production report is likely to be just as influential as Thursday’s Planted Acreage report.

One very important thing to remember while considering the grain markets of late, FUNDS, not fundamentals, pushed the markets higher.  And in the absence of money flow, fundamental factors need to be consistently verified.  A bull market needs to be fed daily, but this is not a time to panic.

Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

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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.

While funds have been driving the market higher in recent weeks, today’s market featured the release the latest USDA supply and demand report.

Starting with old crop corn, imports were increased by five million and exports were bumped up by 100 million bushels.   A net reduction of 95 million versus May took carryout to 1.708 billion bushels.  For the new crop, exports were increased 50 million resulting a net reduction of 145 million to 2.008 billion.  The large reduction in old crop stocks should keep the market supported in the near term.

On the bean balance sheet, old crop demand was increased in both the crush and export categories.  Ending stocks dropped a total of 30 million bushels to 370 million for the 2015/16 crop year.  Looking ahead to the new crop, exports were raised slightly, leaving an estimated carryout of 260 million at the end of the 2016/17 marketing year.

Two big factors to keep in mind while evaluating the reports today are acreage and yield.  Because the USDA will be releasing the final planted acreage report on June 30, acreage and yield figures used today were unchanged from the March intentions report.  This leaves open the possibility for lower corn acres and lower corn carryout.  It also provides for higher bean acres, production and carryout in future reports.  Look for the market to trade today’s 2.0 billion corn carryout with a slightly lower tilt for the time being.  Soybeans will likely have a continued higher bias, particularly in the new crop slot, at least until weather concerns and the June 30th report take center stage.

Given the variability of price movement, now is the time to have pricing orders in place with the grain department to avoid missing an opportunity while we all start to focus on better weather and spring planting season.

If you would like to receive the Weekly Grain Recap via email each week, just send Aaron an email and I will get you on the list. aaron.ulland@chsinc.com

Read Full Market Update

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.