June 17, 2013
Stocks bounced higher to start the day coming off a down week, but speculation about the Fed backing down the current monetary policy will kick off when they meet, beginning tomorrow. The Empire State index from the New York Federal Reserve improved to 7.8 in June, up from a -1.4 in May. The major stock indexes were from 0.3% to 0.6% higher at the commodity close.
The dollar index was a little lower today as strength in the Japanese markets continues. Crude oil steady today with both heating oil and gasoline futures trading lower.
Corn traded higher today to lead into another week of weather and crop condition news. This afternoon will not bring another planted acres report form USDA, so last week's 95% will have to do until the 28th when the planted acres report is out. We will get emergence and condition reports today with 65% good to excellent expected. Corn export inspections were stronger than expected at 14.144 million bushels for the week, more than twice last week's number.
July corn futures were up 13.50 to $6.685. December corn was up 5.50 on the day to close at $5.385.
Bottom line: Rain and cool temperatures delayed corn planting and have created further issues with flooding and need to replant some early planted acres. Anticipated reduction of corn acres and possible lower yield potential has held December futures near $5.50.
Soybeans traded mixed today with bigger losses in the new crop contract as planting progress is expected to be at or above 85% this afternoon. A few corn and spring wheat acres might find their way into soybeans, but not at the level expected a few weeks ago. Export inspections were down to 2.759 million bushels this week, bringing the number well below typical value for summer at around 10 million bushels. The crush for May was released by NOPA this morning at 122.6 million bushels, above the trade expectation of 118.1 million bushels.
July soybeans closed down 4 today at $15.125. The November soybean contract was down 12.75 to close at $12.855.
Bottom line: Tight supplies and planting issues are playing into soybean prices. New crop soybeans are holding near $13 as planting delays and more sales to China offer support. Prices may strengthen if export sales continue and later planting impacts yield expectations. Old crop soybeans remain above $15, presenting cash opportunity to move beans near $16 in many locations as basis slips a little but remains strong.
Wheat prices traded up and down today, finishing mixed as harvest moves north and planting finishes up in the Northern Plains. Kansas City prices were slightly higher as rains delay harvest today and yield reports remain disappointing across much of the currently harvested acres. Chicago traded higher most of the day before finishing a little lower as weather in the Midwest get better for the crop. Spring wheat planting progress should be a little better this afternoon, as Minneapolis prices fell today. Export inspections remain strong for wheat at 21.592 million bushels. Shipments have continued after the concern in Oregon with GM wheat a couple of weeks ago.
July wheat on the Chicago board was down 0.25 to close at $6.805. The July 2014 contract closed the day down 0.25 to finish at $7.3175.
July KC wheat was up 2.25 to close at $7.1375. The July 2014 winter wheat contract was down 1.75 to finish at $7.5875.
July Minneapolis wheat was down 3.75 today to close at $8.0025. The September contract was down 3.75 to close at $7.815.
Bottom line: Wheat markets are pricing weather and export sales as the 2013 crop is beginning harvest in the South. Look for opportunities to complete more wheat sales as harvest moves north and wheat yields are reported.
USDA released this week's export inspection report with few expectations, but the numbers came in positive for both corn and wheat. Soybean inspections were slow, but not really below expected levels considering the tight supply and amount already shipped.
Brazil received rains to the south over the weekend, slowing 2nd crop corn harvest and winter wheat seeding for a short time. Rains in the forecast could create more serious problems for the wheat planting and sugarcane harvest. Argentina picked up some showers early in the weekend, but it was mostly to the north of the wheat belt. Dry conditions will be good for wheat planting and corn/soybean harvest completion. Dry weather is forecast through the end of June for Argentina. Current conditions are not a concern, but could be an issue if weather patterns persist.
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