Highlights
At 10 AM Mountain Time today, the USDA will release its Actual Planted Acres, Quarterly Grain Stocks and Wheat Production Reports. Corn has sold off and beans have rallied going into today’s reports. The analysts expect about a half million more corn acres and a half million fewer beans than the March Intentions. However, based upon market action, the market expects about 2 to 2.5 million more corn acres and 1.5 to 2 million fewer bean acres.
It will be very difficult for today’s numbers to be bearish corn and, to an extent, difficult for the numbers to be bullish beans. The market seems to not care about the old crop inventory numbers, just new crop acres. If there is a surprise, it will most likely be bullish because of less than expected corn and bean inventories and bearish wheat because too much wheat on hand.
July beans have gained a buck the past four days. What does that tell you about old crop soybean supplies?
July corn gained 49 cents the past four days while December corn lost 27 cents? What does that tell you about old crop supplies?
July CBOT wheat has lost $1.78 the past nine days. What does that tell you about the availability of wheat?
Yesterday’s mid-day forecast was drier for the northern half of Iowa, along with parts of South Dakota, Illinois, Indiana, and Ohio.
Gulf corn basis yesterday was 3 cents weaker for July and unchanged for August. Ethanol bids were mostly unchanged. Soybean Gulf basis was steady for July and August as were processor bids except Morristown, Indiana was 5 cents weaker.
The Purchasing Managers’ Index (PMI) is the summary of a survey of the people who do the buying for their company within a given country. It reflects the expected amount of buying the purchasing manager will buy in the next month versus the previous month. A PMI of 50 is neutral, the same amount of purchasing. A PMI over 50 means expanded production is planned.
China’s PMI is one of the most watched indicators for the world economy, especially for agriculture because China imports so much grains and food products.
This morning’s monthly purchasing managers' index (PMI) for China's manufacturing sector came in at 50.2 in June, up from 49.6 in May and less than 49 in April. Normally, such news would send crude oil in a nice uptrend since China buys more crude than anybody.
SovEcon (Andrey Sizov) increased Russian wheat export forecast to record high 42.6 million mt (USDA at 41 million mt). Egypt bought 825,000 mts of wheat yesterday, the largest wheat purchase anyone can remember. And wheat prices finished the day lower around the world. Get the picture? One reporter for a prominent news service wrote, “I did not think there was that much wheat left in the world outside of China.”
Yesterday, we reported Dutch farmers were protesting the government shutting down farms to “save nitrogen.” One of our clients is a former Dutch farmer who has farmed in Great Britain and now the USA for six or seven years. He clarified the “save nitrogen” comment refers to nitrates and phosphates from manure getting into the waterways and groundwater. He said the government does not care about food, they can always import all they want.
Here are the expected numbers for today's USDA Reports:
Broilers & Ethanol Update
Last week:
Broiler egg set was up 2% than the same week a year ago.
Broiler egg hatch was up 1% than the same week a year ago.
Average daily ethanol production:
1,051,000 barrels last week.
1,055,000 barrels the previous week.
1,058,000 barrels the same week a year ago.
900,000 barrels the same week two years ago.
Ethanol inventory was 22.746 million barrels compared to 23.476 million barrels the previous week.
Market Data
This morning:
Crude oil is at $109.88, up $0.10
The dollar index is at 104.90, down 0.21
July palm oil is at 5,125 MYR, up 56. The contract high was made April, 29th at 7,229 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.
December cotton is at $96.19, down $1.29 per cw. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas settled at $6.551, up 0.050(not trading). The contract high was made June, 8th at $9.664. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $4.0102 per gallon, down 0.0265. The contract high was made June, 17th at $4.6444. ULSD stands for Ultra Low Sulfur Diesel.
September Dow Futures is at 30,783, down 216. The lifetime high is 36,832 on January 5th, 2022.
Rain Days Update
The Western Corn Belt has 8 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 1 more rain daysthan yesterday.
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days