Commentary
Front month contracts bore the brunt of the selling today as July corn, beans, soymeal and soybean oil were the big losers versus new crop contracts. Funds in my view for now are unwinding long old crop contracts and buying new crop contracts amid heat and dryness in the Western grain belt. We have a USDA WASDE report on Thursday at 11am, so the unwind of these spreads maybe liquidation ahead of the report. July corn traded to 706.2 overnight but finished the session 3.4 lower at 679.4. July beans made an overnight high at 1623.4 , then fell 63 cents to close the day at 15.60. In my view a massive intraday range. Weekly corn export inspections totaled 1.413 MMT, which was at the low end of pre-report estimates. Corn inspections slowed significantly from 2.104 MMT the previous week but were still nearly 200,000 MT above the same week last year. Weekly soybean export inspections totaled 237,108 MT, which was within the pre-report range of estimates from 100,000 MT to 300,000 MT. The weekly inspections for corn are giving further thoughts that China will likely kick old crop sales to the 21/22 marketing year and might have been one reason for the old crop/new crop sell-off. Time will tell if end users chase July corn and beans higher into month end, similar to what happened when May corn was front month and traded just over 7.65 prior to contract expiration. Crop progress updated this afternoon had corn rated at 72 percent good to excellent, down 4 points from last week and 2 points below analysts estimate. The first look at beans had the crop rated at 67 percent good to excellent, with analysts looking for 70 percent. Its early here and these weekly ratings are subjective.
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