It is somewhat challenging to find the proper word to describe the issuance of the acreage number by the USDA last Friday. The first that came to mind, or at least the first word that was acceptable for print, was irresponsible. Granted, I recognize their job is to take the data they have collected at reporting time and try, without bias, to compile that into a report for the rest of us but, they are undoubtedly aware of the impact, said reports will have on the marketplace, particularly in this era of flash and computer-driven trading. At a minimum, prior to the released of the report, there should have been some type of disclaimer highlighting the far greater than normal possibility for inaccuracy, and that the number will be revised at a later date, but unfortunately, that was not done until well after the released, and the markets mayhem already took place. Do I think that this will all, ultimately “come out in the wash” so to speak after they have conducted additional surveys here during the month of July? Absolutely, but considering we have experienced a historically non-standard spring, it called for a historically non-standard response and explanation from the USDA. As I touched on previously, the USDA will be re-collecting data from 14 dates during July and on the August 12th crop production report will issue revised number if deemed necessary.
That is probably enough soapbox time from me this morning, but I should point out that even with all the fallout that occurred on Friday, the corn market remained above the weekly gaps left back a month ago. While there is a possibility that we have recorded a significant high in this market, with the entire pollination period ahead of us, potentially taking place a month later than average, not to mention the question as to if we can carry this crop to full maturity, by no means would I suspect we have seen the last of the rallies this year.
Although it appears to have provided the equity markets with a greater boost than anything in the ag trade, but it was encouraging to see that the United States and China have at least called a truce for now in the trade war and seem earnest to work for a resolution. China has yet again promised to purchase more US ag goods, and obviously as a goodwill measure purchased beans last Friday.
While not moving markets as of yet, there are a few weather trouble spots around the globe that bare watching. India just experienced its driest June in the past five years at 33% of normal and hot and dry weather in Russia is pushing up export prices in the Black Sea. Conditions remain quite warm in Western Europe as well, and while the most extreme temperatures appear to be south of major growing regions, I understand records were set in Southern France over the weekend with the mercury reaching 114 degrees Fahrenheit.At the morning break, grains continue to struggle a bit with soy and products a bit higher. Macros a providing a slight negative influence as metals are under pressure and equities and the dollar have rallied once again.