On Tuesday, the CME Group’s farm markets lean lower.
At the close, the July corn futures finished ½¢ higher at $6.59¼. New-crop September futures closed 18¼¢ lower at $5.53. December corn futures ended 18¼¢ lower at $5.39.
July soybean futures settled 20½¢ lower at $13.94½.
August soybean futures settled 18¼¢ lower at $13.52. New-crop November soybean futures finished 17¢ lower at $13.02 3/4.
Sept. wheat futures closed 10½¢ lower at $6.51.
July soymeal futures finished $9.80 per short ton lower at $363.30.
July soy oil futures closed 0.34¢ higher at 60.67¢ per pound.
In the outside markets, the NYMEX crude oil market is -0.58 lower (-0.79%) at $73.08. The U.S. dollar is lower, and the Dow Jones Industrials are 76 points higher (+0.23%) at 33,953 points.
Greg Lumsden, Cargill Elevate, says that simply put, the markets are trading a very volatile weather market.
“The trade is hypersensitive to changes in the daily weather models and we are seeing that again today. Earlier in the week, the market was vacillating between improved outlooks in most of the Corn Belt, against dry conditions in the upper Midwest. The trade is also cautious and looking to de-risk ahead of the June 30 USDA report when we will get important updates to stocks and acres.”
Lumsden added, “The Upper Midwest appears poised to remain warm and dry as we head into pollination, but the market is weighing that against great conditions in the central and eastern Belt. Traders are also weary of large increases to acres that could have a big impact to ending carryout projections on new crop.”
“We are still at a crossroads in the market and should expect big volatility aided by machine trading and active funds. If the market believes we will secure enough acres, and the east can make up for the west/upper Midwest, then prices can fall further than most suspect before potentially rebounding later on demand,” Lumsden says.
Lumsden says, “It would be advisable to look at locking in floors with upside to capture very attractive historical prices while still respecting upside potential if the weather situation persists and gets worse.”
The USDA Crop Progress report showed 68% of the U.S. corn crop rated in good-to-excellent condition, down 4% from last week and comparing with the long-term average at 71%. The soybean rating fell 5% (to 62%) of the U.S. crop rated good-to-excellent. This compares with the long-term average at 67%. The hard red spring wheat was reported at 37% good-to-excellent, down 1% from last week and comparing with 68% on the long-term average.
Al Kluis, Kluis Advisors, says that investors continue to monitor weather forecasts for price direction.
“Corn and soybean ratings will stabilize next week, with Iowa showing major improvement while Minnesota and the Dakotas continue to see ratings decline. Now through the end of July is the critical time to watch corn ratings week by week,” Kluis stated in a note to customers.
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