Commentary
In my view, Commodities broadly have not traded well at all since the June 15 Fed meeting results in which rates were hiked 75 basis points with indications of another 175-point hike by the end of the year. Seasonally, new crop corn futures start to roll over during this exact week of the year, provided that the weather outlook is mostly bearish in my view. From this point through August, there needs to be a reason for a rally. That most likely would be a weather-based rally, i.e., hot and dry. However, it is my opinion that there has certainly been a recurring theme this week: liquidation amid less-threatening weather forecasts. Weather forecasts certainly not without a few concerns, but the two-week forecast has significantly reduced the high temperature risk and the market is in risk off mentality. Keep in mind that these forecasts and projections can change in a New York minute. Beans under big pressure as Chinese crush margins have been under immense pressure with lackluster product demand, now pegging at negative values. This keeping Chinese import demand on a more hand-to-mouth basis. Meanwhile, the Brazilian soybean crop has been getting bigger, per-post harvest estimates. Keep in mind tomorrow is option expiration for the July contract and we have the planting progress report next Thursday. For tomorrow’s export sales, is expected to show net U.S. corn sales at 300,000 to 600,000 MT for 2021-22 and 200,000 to 600,000 MT for 2022-23. For soybeans, the export sales report is expected to show net U.S. soybean sales at negative-100,000 to 300,000 MT for 2021-22 and 50,000 to 500,000 MT for 2022-23.
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