Highlights
Russia’s Deputy Prime Minister said Russia plans to increase their oil production in July as countries like India and China are buying up the cheap Russian oil.
Grain, livestock, and dairy markets close Friday afternoon and do not open until Monday evening, in observance of Juneteenth on Monday the 20th.
Extreme heat and humidity have killed at least 2,000 head of cattle in Kansas according to the Kansas Department of Health and Environment.
The corn market is going to continue to be reactive to what the weather model forecasts are predicting for precipitation as the next 5 days appear to be dry for most of the Corn Belt. Any change in forecasts will be quickly reflected in the markets.
Corn was higher last morning making new highs for the week and holding close to their highs.
Grain markets rallied today on a sharply lower U.S. dollar index taking its biggest one-day decline since late March of 2020, roughly the time COVID hit the world.
Updated summer weather maps also continue to call for a higher probability of above-normal temperatures and below-normal precipitation levels.
Export sales for corn today were far from outstanding as the U.S. seasonally starts to wind down its old-crop program and Brazil ramps up its safrinha exports.
Export sales for soybeans this morning were decent for old and new crop and amounts in the middle of estimates. There continues to be news that there was a big meal deal done in China and they are on the hunt for July/August soybeans. The U.S. has a tough time competing with Brazil from June through August. Speculation grows that China will cancel or roll more U.S. commitments or replace them with Brazil stocks.
The dollar index lost 1.5 points yesterday, more than any time since March of 2020 when COVID rocked the markets. That certainly helped wheat and,no doubt corn and beans, but the weather forecast probably had more to do with the corn prices smartly higher than the dollar index. The seasonal trend is up for corn to by June 21st. Get ready to sell!
The last very good opportunity to price 2022 corn will be gone in one to three weeks. Get your emotions and common sense aligned with your marketing plan now if you have not already done so.
Some of you have read the below text every year for 31 years. This will be the second time we have sent this market plan since January first, but with the exception of a handful of you, this information just has not soaked into your brain.
These marketing tools will make farming fun again:
Discussion You Need to Have with Your Grain Merchandiser About Marketing Tools
This is exactly what you need to say to your prospective buyers of your new crop corn, wheat and beans:
As you know, the highest futures price is usually made before the size of the crop is known. I want to have a shot at catching a price near the top on 100% of my expected production. Like all farmers, I have a fear I will not have a decent crop when it comes to pricing our production.
I am looking for a merchandiser who will allow me to engage in a HTA contract for 100% of my expected production before I know for certain what my production will actually be.
You can eliminate my fear of short bushels if you will let me, if I do come-up short on bushels, roll the delivery of those bushels to the next crop year. I will take the risk on the spread from one crop year to the next. I fully realize the market may be inverted. That is at my risk, not yours. I will sell you every bushel I grow if I can price 100% of expected production to you.
The other reason I and most farmers don’t sell enough of our production at a profitable price is because we want to have more grain to sell if the price continues higher. Eventually, no matter how high the price goes, the price will peak, then fall like a rock and all us farmers will still have a lot of unpriced bushels.
I am also seeking a merchandiser who will buy put options for me and attach them to my HTA, just like you do calls now. I will only buy puts if the market firms after I price the HTA so I can make the money on the way down I did not make on the way up. I will never exercise a put; I will either have you sell the puts or I will let them expire worthless.
If I buy corn puts in stair-step up pattern at strike prices 30 to 50 cents apart and bean puts at strike prices 40 to 60 cents apart, my market plan will capture the top of the market without any stress on me or you.
Will you buy corn puts at 25 to 30 cents and bean puts at 40 to 60 cents for me and attach them to the HTA delivery contract?
What is the service fee a HTA, the fee to roll to the next crop year and the fee to purchase put options?
If your merchandiser at the ethanol or bean crush plant will not provide these marketing tools for you, go the nearest coop or privately owned elevator where basis is weaker than the processors' basis and ask that merchandiser to provide the same tools, but allow you to deliver directly to the processing plants, for a fee, of course.
If you give a merchandiser, who has not had your business since the processing plants were built, a chance to buy all your grain and beans and still make a modest profit without handling a single bushel, most merchandisers will jump at that opportunity. You will gain the advantage of being able to deliver your grain to the location of your choice, shop for basis, and other favorable conditions.
More importantly, you will have the opportunity to price all of your production near the top of the market with no fear of short bushels or missing a higher price because you sold too early.
Examine our weather information closely every day, get your merchandisers on board, and be ready to sell more corn at a higher price than ever before. As one our clients said to a group of farmers 26 years ago, "This market plan will make farming really fun again."
Export Sales Tracker
Market Data
This morning:
Crude oil is at $117.06, down $0.53
The dollar index is at 104.35, up 0.72
July palm oil is at 5,610 MYR, down 73. 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 $118.77, down $0.46 per cwt. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.
July natural gas is at $7.359, down 0.105. The contract high was made June, 8th at $9.664. Natural gas is the primary cost to manufacture nitrogen fertilizer.
July ULSD is at $4.5810 per gallon, up 0.0097. The contract high was made June, 15th at $4.6070. ULSD stands for Ultra Low Sulfur Diesel.
Rain Days Update
The Western Corn Belt has 9 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