Weekly Market Wrap-Up

Grain Market Commentary

Friday, June 14, 2019

by Jay Smith, Grain Associate, The Andersons

The week started lower on the back of the COT report released last Friday and drier weather for most of the corn belt over the previous 5-7 days. The planting progress report and CONAB’s increased Brazilian crop estimate also put pressure on the markets. Weather again ultimately ended up dominating the markets this week. The planting progress report did not present any overly shocking numbers to trade, but they were aggressive, it was the first time in 5 weeks numbers fell in line with expectations. Not all information will be figured out this week, but trade started to get an idea of the USDA’s thoughts on acreage loss and yield drag. The numbers were not overly shocking, but the aggressiveness of the government reductions to corn caught the markets slightly off guard. The WASDE report released on Tuesday pegged corn production at a 4-year low coming in at 13.68 billion bushels and a BPA of 166, a 5.7% reduction from 176 last month, causing a jump higher immediately after its release. Midweek saw the forecast turn wetter and cooler in most of the eastern belt which caused markets to jump higher until close on Friday. With so many remaining unknowns, prices will look to remain volatile through the entirety of the U.S. growing season.


Corn

July corn opened the week at $4.13 and closed at $4.53. A 40-cent increase. The December 19 corn contract hit a new high this week at $4.65. The COT report released last Friday showed the funds holding a larger long position than expected, with corn being long 95k contracts as of last Tuesday. Four weeks ago, corn was sitting in a 300k+ contract short position. The crop progress report put corn at 83% planted compared to last week’s 67% and the five-year average of 99%. The 16% week over week increase paired with favorable weather the first half of the week has trade confident in a 92%+ figure heading into next week report. But, with rain returning to the forecast questions about any further progress began to arise. Corn also saw their first crop condition report coming in at 59% good to excellent condition. Only 62% of the crop has emerged thus far meaning the G/E number has room to move rather significantly. Ideal weather is needed moving forward to halt the further discount of BPA moving forward, which, according to the extended forecast is not very likely.

The Andersons Weekly Wrap Up June 14, 2019 Corn


Soybeans

July soybeans opened the week at $8.53 and closed at $8.96. A 43-cent increase. Soybeans came in at 60% planted, which is still behind the 88% five-year average but fell in line with trade estimates. Soybeans were left unchanged on Tuesday’s WASDE report, but stories began circulating about reductions in the July report. Markets are keeping an eye on soybeans and the debate started this week of lost corn acres going to beans or acres being lost completely. The 1 billion+ bushel carryout is still burdensome, but the corn story and the ongoing weather concerns kept markets from sinking.

The Andersons Weekly Wrap Up June 14, 2019 Soybeans


Wheat

July wheat opened the week at $5.05 and closed at $5.38. A 33-cent increase. On the domestic front, feed and residual was increased by 50 million bushels, aiding in reducing the carryout to 1.072 billion bushels. Wheat futures also increased to a six-month high this week.

The Andersons Weekly Wrap Up June 14, 2019 Corn