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We are confronted with relatively quiet two-sided trade as we begin this new week, with wheat currently the only market able to remain in the positive column. Realistically, wheat is the sole market that has a verifiable production issue at this time, which was reflected in the positioning by managed money last week. They sold 89,000 contracts of corn and 35,000 contracts of wheat but purchased 1,000 wheat. Do note that they remain a net long in all three markets.
As we bide our time waiting for the June release from the USDA, there are a number of other independent estimates/reports rolling in for global crops. SovEcon from Russia has trimmed their total grain crop from the last estimate by 6.6 MMT, reducing it to 119.6 MMT. This would be 15.4 MMT beneath last year. More than half of the cut came via wheat where they reduced the estimate from 77 MMT to 73.1. Coceral, who is a European grain trade association group published several adjustments in their estimates. Total EU corn production was trimmed 1.5 MMT to 60.3 MMT, and the soft wheat estimate was lowered 1.7 MMT to 138.8. The rapeseed estimate was cut 1 million to 21 MMT, but barley was boosted .5 MMT to 60.8. I am not sure if I would really count the USDA making like adjustments on tomorrows estimate.
With that in mind though, once again here are the trade survey estimates; For US wheat production, the average estimate lines up at 1.822 billion bushels, which compares with last month at 1.821. Of this figure, the trade is looking for 1.190 billion in winter wheat. The projected ending stocks for the 2017/18 wheat is 1.079 and for 2018/19, 958 million. Both of these would be an increase from May. Seeing there should be no changes to the corn and bean yield estimates this month, the focus is on ending stocks. For 2017/18 corn is expected to come in around 2.166 billion (-16 mill.) beans at 522 million (-8 mill.) For next year, the average estimate for corn is 1.663 billion (-19 mill.) and for beans 417 million ( 2 mill.). The average estimate for Argentine corn is 32.53 MMT (-.47) and beans 37.89 (-1.11) and for Brazil the corn crop 84.47 MMT (-2.53) and beans 117.43 ( .43). Global ending stocks of 2017/18 are forecast to come through at 269.99 MMT in wheat, 193.39 MMT for corn and 91.35 MMT beans. For next year then, the average estimates are 263 MMT wheat, 157.56 MMT corn, and 86.74 MMT beans.
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