Commentary
Last week’s bullish versus expectations planted acreage report apparently has been forgotten. The reason is weather in my opinion. European model forecasts are calling for 3 to 5 inches for most of Iowa, South Dakota, Southern Minnesota and extending east through Illinois into Indiana and Ohio the next ten days through July15th. The forecasts need to verify obviously, but most of the areas that needed the moisture the most received it or are scheduled to receive the rain. This is counter to what is going in Brazil right now with their secondary corn crop. Its short there and getting shorter due to massive drought followed by frost that has cut production from 102 million metric tons to 85 million. I included a chart of July 22/Dec 22 corn. If we get a dead cat bounce or profit take/unwind of near term shorts, we may get a bounce to the gap level up at 82 cents. Keep in mind we do have another WASDE report on Monday. The USDA will update ending stocks for 21/22 crops both here and global numbers. The spread mentioned below will grind lower in my view due to agreeable weather in the Midwest. However should these wet forecasts not continue to verify, it s my contention this latest dip will ultimately be a major buying opportunity moving forward. Extreme caution is warranted here at these levels. In my opinion, Monday July 12th is a big day. Another WASDE report at 11am central followed by crop conditions at 3pm that should update and account for this week’s rains.
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