Corn closed higher, wheat and soybeans lower after USDA kicked the can down the road in the June WASDE in nearly every category except global wheat numbers.
Oliver Sloup, Blue Line Futures, says he wasn’t expecting much out of the report, but USDA really punted. “Today’s report was a perfect example of that.”
Corn ending stocks and South American production were all left unchanged from May and so they were bearish relative to expectations.
However, corn managed to close higher in part due to the hot dry extended weather forecasts.
The higher day in corn was encouraging to Sloup. “I’ve kind of been telling folks no new news in the corn market, no new bearish news I guess at the very least, is actually good news,” he explains.
Soybeans saw a 10 million bushel cut in old crop crush and a 1 million metric ton cut in Brazil soybean production, the rest of the balance sheet was unchanged.
However, Sloup is concerned about the sluggish demand for soybeans on the export front, even with the three recent flash sales of old crop soybeans to China.
He says now the markets will turn their attention to the month end USDA Acreage and Quarterly Stocks reports, weather and the fund position.
That uncertainty could spur a little short covering in corn and even other portions of the grain market heading into the end of the month and the end of the quarter.
However, Sloup says funds managers are clearly reestablishing short positions again in the grain futures. However, he thinks part of the collapse in the wheat market has also been some farmer hedge selling.
