Weekly Grain Update 6.24.16

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
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Ostrander: 507-657-2234

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