Report Day: Corn acres were set at 89.1 Mil, vs. 88 in March. Bean acres totaled 89.6, vs. 89 Mil in March. All wheat acres totaled 47.8, up 500,000 from previously via expansion in spring wheat seedings. Winter acres were left unchanged. Durum acres fell slightly. On the surface, beans were slightly lower than expectations while corn was about a half a million higher but lower than last year. Wheat rolls higher off of technical buying and world crops in distress in Europe and Russia. Corn at one point traded to 10 cents higher and up to key trendline resistance at 376.0.this coincided with wheat pushing near 25 cents higher pushing corn higher. New crop beans sniffed 9.00 but couldn’t extend. Beans have no friends right now with potential tariffs staring any remaining bulls right in the face as of July 6th. While most say the tariff noise could be priced in the market with this two week break in price since the saber rattling began in earnest, today’s rally was again another rally that was sold into. This tells me the path of least resistance is lower. This premise could change with the weather if we turn hotter and dryer into July. Sunday nights open could tell us something despite noise in the market that grains always rally into the 4th of July.
Wheat performed best for the day and looks to keep pushing here amid global weather issues. The key level next week sits at 480.0, with key resistance at 5.10. Today’s high was 5.09. A close over 5.10 could push us to 5.31 and then 5.52. I like Chicago wheat over corn here basis September at 1.35 over Sep Corn. A close under 1.17 and I would exit. I look for a move to 1.64 over potentially.
Weather and its impact on future yields will determine if we test the lows from a few weeks prior and even extend to make new lows. While the trade will be on notice for any trade agreements regarding tariffs or a new NAFTA Deal, rainfall totals and prolonged heat if any will be the ultimate determinant here. I believe the trade is itching to buy at these levels but until the funds see otherwise the downtrend continues in beans.
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