Too dear to buy and not dear enough to sell. Grains still appear to be hovering as the trade has been stymied by the USDA acreage fiasco and even though the USDA usually does not tweak corn or bean acreage figures until the August reports there is an uneasiness about their past behavior with the Chinese Census Revisions and the Non Revision Acreage Report last month. We respect and fear the USDA and we’ve argued whether they are sinister or inept. We’ve decided on a combination and sense that they are “sinistnept”.
Corn and beans in the ground have enjoyed and benefitted from the recent spell of hot and humid conditions and this may show up in tonight’s report. Regardless, it’s a long season but, believe it or not, we’re only 2 months away from the traditional “first frost fear”. The new weather forecast of hot and dry may help the crop in the short run but a lack of precipitation and too much heat is never good!
At 11 AM Chicago time on Thursday the USDA will issue winter wheat production estimates for conditions as of July 1. The trade is anticipating little variation from the June number. World Supply/Demand figures will be argued but, the domestic Supply/Demand figures might be questioned if the USDA, as anticipated, base new crop projections on the “questionable” acreage estimates issued in late June. Yes, corn basis levels in the eastern belt have been very firm given the acreage concerns but, taking delivery and executing the transportation to ethanol plants might be too difficult for spreads to strengthen more than they have strengthened. Hot and dry over the next 2 weeks is an answer to the eastern wheat millers’ prayers as disease issues may slow. We’ll be keeping an eye on basis levels and receipts over the next few weeks.
Keep an eye on the weather but unless we get more extreme with heat and precipitation it appears that the market is range bound through the August 12 crop report.
The information contained on this site is the opinion of the writer and obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in current market prices.
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