Tuesday, July 5, 2022|
Closing Markets: Corn -27 Old & -29 New. Beans -70 Old & -79 New. Wheat -39.
December corn futures finished today's session 29 cents lower at $5.78 1/2, November soybeans were down 79 1/4 cents at $13.16, and December wheat in Chicago was 38 1/2 cents lower at $8.24.
Trade picked up right where it stopped last week with sharp losses being shown across the board. This was the ongoing result of managed money flowing out of markets to invest in the US dollar instead. Energies and equities also suffered sizable losses as economic worries fueled recession fears, further stressing the commodities. Soybeans took additional pressure from losses in the global Palm Oil market. We did see light support from weather as even with recent rains much of the United States needs to see more precipitation, especially across the Corn Belt.
The Fats and Oils report for the month of May showed soybean crushing was about as expected. A reported 181 million bu. (mbu) of soybeans were crushed in May 2022. This was equal to April and 7 mbu more than the US crush in May 2021. Cumulative crush for the year now stands at 1.67 billion bu. (bbu). Crude soy oil production in the month totaled 2.16 billion pounds, up1% on the month and up 6% on the year.
The ethanol grind data for the month of May has also been released. Corn use for ethanol totaled 446 mbu in the month, up 7% from April but down 1% from May 2021. Year to date corn demand for the ethanol industry is now at 4 bbu. A reported 1.9 million tons of dried distiller grains were produced in May, up 11% from April but down 2% on the year.
The Stats Canada firm released its revised acreage numbers this morning. Stats now has all wheat acres at 25.4 million for the 2022/23 production season. This is just over the 25 million acres estimate from the last projection and above the 23.36 million a year ago. Canola plantings were estimated at 21.4 million acres versus 20.9 in the April forecast and last year’s 22.5 million acres. Corn acres in Canada are forecast to increase 1.4 million on the year while soybean plantings hold steady.
US export inspections for the week ending June 30th were all down from the previous week. Corn shipments totaled 26.7 mbu for the week, down 45.7% from the week before. Soybean loadings totaled 13.04 mbu, down 25.4% on the week. Wheat inspections were a minimal 4.1 mbu, a 68.3% weekly decline. These totals also all fell short of what is needed to reach yearly USDA export projections.
Several traders and analysts have already incorporated last week’s USDA data into their balance sheets. It is no surprise that many of these new formulas are coming up with tighter stocks to use than the USDA is currently using in their outlook. Private analysts are taking the revised acreage numbers and quarterly stocks figures and combining them with weather forecasts, historical yields, and demand projections to come up with new stocks to use ratios. While all of these tighten, the most notable is on soybeans, where a historical minimal ending stocks figure is possible.
One of the biggest factors in current price discovery at the present time is Managed Money flow, same as it has been for the past several months. The difference now is that this money is flowing out of the commodity market and applying pressure. The removal of these traders is mainly the result of ongoing inflation and economic worries and how they have changed the landscape of all markets. This comes even with supportive fundamental factors and even in the soy complex where US balance sheets are forecast to be very tight. The best chance of reversing the attitude of these traders would be a weather threat for the US.
Another factor behind the recent selling in commodities is the shift in the technical outlook. Nearly all technical indicators have turned negative in the past week, showing that is the path of least resistance at the present time. Not only has this encouraged fresh selling, but it has also diminished any buying interest as well. Some of this technical weakness is also seasonal, primarily in corn. Technical traders have also looked for years with similar trends are basing current activity off those moves.
Have a great evening!!!!
Emery Manager & Originator:: Topflight Grain Cooperative, Inc.
593 Emery Rd :: Maroa, IL 61756
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