Friday Afternoon Comments (7-22-16) Corn futures finished the day 1 cent firmer – finding pressure from continued fund liquidation in beans. CZ traded a 20 cent range this week and lost 16½ cents this week compared to trading a 30 cent range last week and losing just 4 cents. As sharp as the rally and pull back have been this year (72 cents from early May to mid-June), last year’s rally was more pronounced at 90 cents from Mid-June to Mid-July. Funds were even at mid-day and are thought to be short roughly 15,000 contracts, so maybe we are trading fundamentals? This week it seems we moved away from weather forecasts 24/7 and are now spending more time focusing on demand and possible increases in yield potentials rather than hot/dry weather forecasts. Both short term and long term forecasts for the U.S. point to above normal temps and below normal precip but the heart of the corn belt is mostly in the normal range August and September. Thoughts continue that Brazil’s corn crop is still 3-4 MMT too high and this will filter into lower export projections with additional demand for U.S. and Ukraine corn being a possibility. Brazil has apparently pulled corn offers and Argentine corn is moving to Brazil. Argentina is having issues with a truck strike and bushels at port are an issue. This will ultimately be resolved, though.
Soybean futures closed 23-26 cents lower but 22 cents off session lows for SX! Funds were sellers of 25,000+ contracts at mid-day and are still estimated long 100,000+ contracts. They were also sellers of 8,000 meal and 6,000 soyoil contracts at mid-day. Until the selling subsides or weather issues resurface, soybeans most likely remain defensive. SX had another 100+ cent trading range this week, but unlike last week where they finished the week close to unchanged, this week they lost 69 cents. Last year SX rallied 138 cents from mid to late June. This year SX rallied 300 cents early March to mid-June. Weather forecasts remain warm/dry for August but if we go into the month with ample soil moisture, this will offset that forecast to some degree, which could temper convictions we will see a large rebound in futures in August. There are analysts bold enough now to talk of yields above USDA projections.
Wheat finished the day 9-10 cents higher and WZ finished the week a ½ cent higher. Funds already holding a sizeable short position, seasonal lows usually formed at this time, and EU (especially French) production being reduced is expected to help wheat rally at least to some degree.
1.25" rain at the elevator Thursday night/Friday morning.
7 Day Rain Forecast (July 22-29)
Comments from Mid-Co Commodities.
Have a good & safe weekend!
Don't be afraid to give up the good to go for the great. John D. Rockefeller
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