Morning Comments; Tuesday, June 30th, 2020
Agrivisor - SETZ - Tue Jun 30, 6:41AM CDT

The condition of both corn and soybeans improved 1-point last week despite less than ideal conditions in parts of the Corn Belt. The US corn crop is now rated 73% Good/Excellent and soybeans are at 71% G/E. The progress of the crops is mixed with a slow corn silking but a faster pod setting. If this continues, we will soon start to hear talk of an early soybean harvest and possibly a larger crop. Of all the conditions released one that is getting more attention is the poor rating on US pastures which are at 24% Poor/Very Poor. This is from the less than ideal growing conditions in the US Plains and could start to lead to higher cattle placements and elevate feed grain usage. The majority of today’s session will be spent getting final positions in place ahead of the June Quarterly Stocks and Revised Plantings reports. These will both be released at 11:00 CST. Average trade estimates for grain stocks on June 1st are 4.96 billion bu of corn, 1.39 bbu of soybeans, and 987 mbu of wheat. These would be decreases on all three, with 244 mbu less corn, 392 mbu fewer soybeans, and 93 mbu less wheat. For acres, average trade estimates are for 95.14 million on corn, 84.83 million on soybeans, and 44.72 million on all-wheat. These would be increases of 1.32 million on soybeans and 70,000 more wheat from the March intentions. The corn acreage would be a 1.85 million decrease from March. Compared to last year, corn acres would be up 5.44 million, soybeans up a large 8.73 million, and wheat plantings down 43,000 acres. Aside from this data, trade will focus on month and quarter end positioning today as well.

Highlights

* Month/Quarter End

* All spot contracts now in delivery

* Stocks/acreage report at 11:00 AM CST

* Covid-19 cases continues to rise

* US inventory main source of commodity demand

* Feed demand under-estimated

* China threatening to shut off US purchases

* US crop reports highly variable

* US dollar starting to rebound

* ECB corn bids 18 cent premium to WCB

* ECB soybean bids 42 cent premium to WCB

Corn

* Corn 73% G/E, +1%

* Corn 4% silking, 7% average

* Average acreage estimate today is 95.1 million

* Average stocks estimate is 4.96 bbu

* Last year’s stocks were 5.2 bbu

Soybeans

* Crop is rated 71% G/E, +1%

* 14% is setting pods, 11% is average

* Average acreage estimate is 84.8 million

* Average quarterly stocks 1.39 bbu

* stocks would be down 392 mbu from year ago

Wheat

* Winter wheat 41% harvested

* Spring crop rated 69% G/E

* Total wheat acres estimated 44.7 million

* June 1st stocks estimated at 987 mbu

* Year ago stocks were 1.08 bbu

Livestock

* Heat stress builds on cattle

* Slaughter weights starting to decline

* Covid cases bring additional grilling demand

* Economic worries weigh on demand

* More US restaurants re-closing

RISK DISCLAIMER: The risk of loss in trading commodity futures and options is substantial. Before trading, you should carefully consider your financial position to determine if futures trading is appropriate. When trading futures and/or options, it is possible to lose more than the full value of your account. All funds committed should be risk capital. Past performance is not necessarily indicative of future results. The information contained in this report is believed to be reliable but is not guaranteed to accuracy or completeness by AgriVisor, LLC. This report is provided for informational purposes only and is not furnished for the purpose of, nor intended to be relied upon for specific trading in commodities herein named. This is not independent research and is provided as a service. As such, this is considered a solicitation.




 

Market Commentary provided by:

Karl Setzer Grain Commentary