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If this first week of June is a harbinger of what is to come through the balance of the month, we could have a few rough weeks yet ahead. If we were to close right now, July corn would be down 15 ½-cents, July beans 42-cents and July wheat virtually unchanged. The combination price for the three commodities now sits at the lowest point traded since the end of January and, possibly with the exception of wheat, there would appear to be little news to encourage buyers to scramble back in. Be that as it may, I do suspect that we should begin seeing a few value buyers showing up to hunt for a bargain here and there and I would not expect to see speculative funds to completely abandon ship until there is a little more confidence that a crop is made. For gosh sakes…all the weather risk still lays in front of us, and at this price range, there would appear to be little to no risk premium factored in. We normally try and kill a crop two to three times during a season, and we have only done so once so far this year.
On the international front, (ignoring, for now, the acrimonious start to the G7 summit) we find that demand for corn from stocks in China appear to continue to fade. At the latest auction, 933,805 MT were purchased which represented only 23.4% of the quantity offered. Over in Europe, we are told that 98% of the corn acreage in France has now been planted but the good/excellent rating did slip 7% this week but at 77% is still not too bad. Winter barley conditions in that country were unchanged at 75% good/excellent and spring barley at 78%. In the southern hemisphere of the Americas, the Rosario Grain Exchange sliced their soybeans forecast 2 MMT to 35 million, and AgroConsult is predicting that Brazil will potentially push planting of beans up by 1 million hectares this coming year.
With the weather outlook for the next couple weeks including decent moisture for much of the corn/bean belt, about the only other news item that could provide relief would be the June reports. Once again, here are the trade 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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