3 Big Things Today, June 24

1. Soybeans Higher on More Wet Weather, Upcoming USDA Reports

Soybeans were higher in overnight trading amid ongoing rainfall and two upcoming USDA reports this week.

Al Kluis, Kluis Advisors, says weekend rains sparked the overnight markets to shake off the idea that weather looked favorable (warmer and drier) for planting the remainder of the U.S. soybean crop.

Also, Friday’s weaker market reacted to large liquidating trade volume, since the July options expired on Friday.

“Today, the USDA Crop Progress Report will show the corn crop is 100% planted. That is because farmers are done planting corn. The crop conditions will be up 1% to 2%, at 60% or 61% good to excellent with the warmer drier weather in the western Corn Belt offsetting the wet conditions in the eastern Corn Belt. The first report on the soybean conditions we estimate at 60% good to excellent. It’s tough to evaluate a crop that has not emerged,” Kluis told customers in a daily note.

Soybeans for July delivery traded  6½¢ higher to $9.09¼ a bushel overnight on the Chicago Board of Trade. Soy meal fell was up $3.10 a short ton, while soy oil dropped 0.06¢ to 28.38¢ a pound.

Corn futures for July delivery were up 3¼¢ to $4.50 a bushel overnight.

Wheat for July delivery rose 2¼¢ to $5.28¼ a bushel overnight.

Also, this week, investors will be eyeing the USDA’s June Acreage Report. There is a lot of uncertainty with the report, due to the wet weather causing prevent planting decisions. Because the USDA survey went out to farmers in early June, the trade believes farmers made planting decisions after the survey was conducted.

“What will the USDA report for total combined corn and soybean acreage? In 2018, we had 178.3 million acres, the latest monthly USDA report (June 11 2019) projected 174. 4 million acres. With all of the prevent plant acreage, we would not be surprised to see the total combined corn and soybean acres drop to 170 million acres or less,” Kluis told customers in a daily note.

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2. The Funds Extend Long Positions In Corn Market

Heading into this week’s big data dump by the USDA, believed to keep the grain markets volatile, the outside investors are getting longer the corn and soybean markets.

This means the funds see upside potential for these markets.

On Friday, the CFTC’s Commitments of Traders Report showed the funds are long the corn market by 155,030 contracts, longer the market vs. a week ago.

Merchants/producers are short by 477,637 contracts, getting shorter the market vs. a week ago, adding an additional 75,630 short positions vs. just 17,189 long positions this week.

For soybeans, the managed funds are short the market by 54,275 contracts, not as short as a week ago. They cut short positions by 28,347 vs. a week ago while adding only 6,267 long positions.

Meanwhile the merchants/producers are short the soybean market by 67,037 contracts, bigger shorts than a week ago. They cut long positions by 15,716 while adding 36,219 short soybean positions vs. a week ago.

See the report at https://www.cmegroup.com/tools-information/quikstrike/commitment-of-trad....

 
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3. Wet Then Warmer/Drier Weather Seen For The Midwest This Week

The Midwest weather could remain wet this week, with drier weather arriving before the month of July.

The temps this weekend were cool in the central and northern Corn Belt, according to David Tolleris WxRisk.com.

The weekend rains were about as expected, he says.

“Many areas in the southern Corn Belt got 1 to 3 inches of rain with a lot of rain on Sunday in the southern and eastern Corn Belt,” Tolleris told customers in a daily note.

Tolleris added, “The one-to-five-day forecast brings more rain with most of the rain over by Wednesday. By day five, it turns warmer and dry – not hot, just seasonal temps. That is also the forecast for the six-to-10- and the 11-to-15-day forecast into early July.”

The July weather is expected to start out dry.

“The forecast is drier but not totally dry. A west to east zonal flow creates mostly seasonal temps. It gets hotter as we go into the second week of July,” Tolleris stated in a daily note to customers.