Weekly Grain Update 6.12.15

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

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