Commodities Report
July 3, 2018

 

 

Close July 3

June 26

1 week change

Dec Corn

3.65

3.73

- .08

Nov Soybeans

8.64

8.88

- .24

Sept Wheat

4.91

4.83

+ .08

Oct Hogs

59.40

60.95

- 1.55

Oct Cattle

110.35

105.90

+ 4.45

Cdn $

76.17

75.25

+ .92

US $ Index

94.60

94.72

- .12

Crude Oil

74.16

70.16

+ 4.00

Gold

1255

1260

- 5

US 10 Year Notes

120-12

120-00

+ 12

TSX Stocks

16238

16328

- 90

 

Grains lost more ground over the past week. Steamy temperatures and adequate moisture, has crops developing quickly. Trump isn’t backing down on his tough trade talk, which added to the negative tone.

US corn, as of July 1, was rated 76 percent good or excellent. While that was down 1 percent from last week, it is still the highest rating for that date since 1999.

Soybeans lost 2 percent out of the 2 best categories, but are still at a respectable 71 percent. Average for that date is 67 percent good and excellent.

17 percent of US corn is silking, the second fastest rate since 1981. 27 percent of US soybeans are flowering. Usually only 13 percent are now. With all the heat, crop progress will continue to be faster than normal. Half their winter wheat is harvested.

USDA released their quarterly stocks and acreage reports on June 29. It did little to change the bearish tone, as there were no major surprises in the report, so traders quickly focused again on the good growing conditions.

US corn acres were put at 89.1 million, down 1 percent from last year. This was 500,000 more than expected. Soybean acres were pegged at 89.6 million, also down 1 percent from last year, and close to expectations.

All wheat acres were 47.8 million, up 4 percent from last year, and 700,000 more than pre-report guesses. The increase was entirely in spring wheat acres, which are up 20 percent from last year.

The US corn inventory at June 1 was put at 5.31 billion bu., up 1 percent from a year ago. USDA says soybean stocks were 1.22 bln bu., up 26 percent from last year. Old crop supplies are more than adequate to meet anticipated demand.

It will be interesting to see if the period right around their July 4 holiday will again result in a change in trend. With markets seriously oversold, the possibility increases. Last year, prices topped shortly after their Memorial Day holiday, and fell to their lows by harvest time.

Large speculators remain firmly in selling mode. In the latest week, they sold another 43,000 corn contracts and 23,000 soybean contracts. They are now short 8000 corn and 75,400 soybean contracts. Their record short position in soybeans was 119,000 contracts.

Trump continues to forge ahead with his disruptive trade threats and policies.  Even the pro-business Chamber of Commerce is challenging his words and actions, but Trump has already proven he doesn’t listen to anyone that doesn’t agree with his views.

Crude oil traded at its best level since late 2014, despite higher OPEC production. The Canadian dollar gained nearly a cent, putting some pressure on soybean basis. Corn basis remains firm, however, as producers have shut the bin doors since the price drop.

 

 

- Frank Backx, Hensall Co-op Grain Marketer