The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
The Hueber Report is a grain marketing advisory service and brokerage firm that places the highest importance on risk management and profitable farming.
Click here for a free trial
Just like that, one-half of 2018 is now in the history books as are the June acreage and grain stocks reports. As is often the case, the anticipation of a report and the action leading into the release send prices to extremes that more than should adjust for the underlying changes in the fundamentals and we respond with a reaction of relief. Granted, the trend in front of these numbers were accentuated by the Trade Tariff Terrors, but we appear to have been provided with at least a brief respite from those concerns. Unfortunately, the key word is brief, as the issue still looms large in the near future. It will be interesting to see exactly how it is reflected in the next supply/demand report as the Chief Economist for the USDA said they would be factoring this into the numbers.
Realistically, and thankfully there was little of surprise value in the reports last week which allowed the markets to quickly refocus on other things and primarily concerns about wheat crop conditions in Europe’s largest producing nation, and 5thlargest in the world, France. According to Strategie Grains, the heavy rains during the late winter/early spring period created irreparable damage, and they have trimmed the crop another 4 MMT, placing it at 33.2 MMT.
Managed money continued to add to a primarily short position last week as we headed into the USDA number. They sold another 46,000 contracts of corn taking them to a net short position of 60,000; 31,000 beans bringing them to a net short of 44,000 contracts and 12,000 wheat moving them to a short holding of 12,000 contracts. They still hold a long position of 63,000 contracts in meal but sold 20,000 contracts during the week and purchased 3,000 contracts of bean oil but still remain short 90,000.
The price relief that was witnessed post report appears to run its course, and we have grain and soy under pressure once again. We most certainly are not seeing any help from outside markets either this morning as energies and metals are lower and the dollar is pressing higher. Equities are also under pressure, which at times could be regarded as positive for commodities but currently, it is suffering from the same tariff concerns.
No comments have been posted to this Blog Post