Weekly Grain Update 6.5.15

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
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