All markets made new lows on favorable weather. Old crop beans rallied early in the week but cash turned weak and liquidation was seen ahead of the Goldman roll. Corn crop ratings were issued and were some of the best ever to start the growing season. Chicago continued into the abyss with demand lacking, harvest ahead, and generally favorable crops around the world. KC made new lows but bounced later in the week on poor harvest results/low crop ideas.

Corn – Corn ratings and favorable weather were the features. The first condition rating was 76 G/E, 22 Fair, and 2 P/VP vs 63/30/7 at the same time last year. My initial yield forecast after going through each state was 164.6 bu/a – I have a feeling this may end up being low but it is too early to tell. There was some talk of 170+ this week. Planting was 95% complete vs 95 ave with roughly 2 million left to plant. ND was 86% vs 88 ave with MN 93 vs 95. Emergence was 80% complete overall vs 80 average with IL 91 vs 82, IN 83 vs 73, IA 89 vs 89, OH 62 vs 66. Ukraine maize was planted on 4.8 mil hectares – 97% complete. Export sales were 551 tmt old crop and 20 tmt new. Japan, Columbia, and Egypt were the best buyers. Korea bought 50 tmt S Africa corn. China put 3.5 mmt corn up for auction from reserves this week and sold about a third. Weekly ethanol production was 939 vs 927 last week with stocks increasing to 18.3 from 17.5. There were no imports. Production margins were near steady around 190 cents with forwards a bit weaker. Blend margins were near 86 cents vs 65 last week. RINS were 45 vs 47 and DDG values were lower this week. The EPA punted until Sept on the mandate decision –surprise. Broiler eggs set were 101% of year ago. The weather pattern has plenty of moisture with mostly mild temps. Crops are off to best start in a long time with nothing threatening on the horizon at this point. Funds are still long and may just leak into early July.

Wheat –continued to work lower as most fresh business is going to the Black Sea and there are no major crop worries around the world. I still don’t like the pattern for Russia/Kazakhstan spring wheat but there is rain in the forecast for next week and no one seems concerned yet. US crop ratings didn’t move much with the recent rain but my HRW crop edged up – I am at 723 vs 710 previously. Informa came out at 744 this week and the USDA is at 746. I have heard reports near/below 700 milbus and OK yields are coming in from 10-25 bu/a. USDA’s OK yield was 19 bu/a. There is also evidence of freeze damage showing in north central KS. TX harvest is 16% complete with OK 6%. The HRW areas are forecast to get heavy rain over the next week – at exactly the wrong time. Spring wheat complete vs 88 ave. ND was 83% complete vs 81 ave with MN 84 vs 95.

Emergence was still behind at 67% vs 72 average with ND 51 vs 61 and MN 60 vs 81. Western Can wheat seeding was 75-80% complete vs 90 ave. Informa forecast winter wheat production at 1396 milbus – 744 HRW, 447 SRW, and 205 white vs the USDA at 1403 – 746, 447, and 209. I am using 723, 444, and 209. Russia’s Ag Min lowered their all grain crop forecast to 96.8 mmt from 100 mmt previously but still up from 89.3 last year. IKAR forecast all grain at 96 mmt with wheat 54.5 mmt vs 52.0 last year. 54.5 seems high but can add 2.0 mmt to last year just on Crimea. There is still a ways to go on the spring wheat crop. Ukraine has been wet recently – their wheat crop is expected to be roughly 40% feed vs 20-30 the last couple of years. Export sales were 2 tmt old and 341 tmt new. This was the last week for old crop sales. New crop buyers were Nigeria, Sri Lanka, and Japan. Turkey bought 165 tmt from $276-293/ton C&F – mostly Russian with Hungarian and Serbian thrown in too. Japan bought 107 tmt US/Canada/Australia. Pakistan bought 100 tmt Black Sea. Jordan bought 100 tmt from $290- 291/ton C&F. They will tender again next week. Algeria tendered again after buying 700 tmt last week. Oman bought 60 tmt Russian, Indonesia bought 200 tmt Russian, and Thailand bought 50 tmt US. GASC changed their moisture specs back to 13.5% moisture which puts French back into play. This could make Russia more aggressive in future tenders. China harvest is said to be 25% complete. Their domestic values are still near all-time highs and some are expecting import permits after their harvest is digested. It remains to be seen if the SRW buying last year was a fluke. It would be a big deal though if happened again. The EU issued 285 tmt soft wheat export licenses with the crop year total 26.7 mmt vs 18.2 at the same time last year. There was talk of Braz buying HRW. KC broke $1.50 since early May. The HRW balance is tight – harvest results, if less than expected may provide support as well as Braz interest. I do not like the pattern in Eastern Russia/Kazakhstan. Everyone is hanging their hats on a rain forecast a week out but there is heat in the meantime and a Russian spring wheat issue could tip the balance. SRW is cheaper than world values here for spot and am not interested in pressing further. KC could rally back a portion of what was lost over the last month.

Beans – planting surpassed average with the main Corn Belt states now well ahead of average. Overall was 78% planted vs 55 last year and 70 ave with IL 85 vs 65, IN 81 vs 66, IA 94 vs 83, MN 75 vs 80, and OH 66 vs 70. Emergence was 50% vs 45 ave with IL/IN/IA ahead of average. It was a volatile week with the front end under pressure, but new crop also losing on the planting progress and favorable weather. Old-new spreads lost over 20 cents from last week and nearly 40 from early week highs. Beans are still deciding whether we’re trading old or new crop. Friday was the first day of the index roll and July was under pressure. Cash markets have firmed however and I wouldn’t be surprised to see it grab next week. We continue to do old crop business and the import math doesn’t seem to be adding up to enough. Either the crop was severely understated or the market is about to blow. It may happen during expiration which would be dissatisfying for many. April imports were less than the market was expecting and May/June/July needs to be big. Argentina harvest is 84% complete – vs 97 last year. It is seeming more likely that they will continue to hoard beans as a currency hedge. Their corn harvest was very slow and producers may be more willing to sell corn in the near term as that catches up (corn – 41% vs72 last year). Another feature this week was SAm oil basis rallying. Oil share turned but oil has been losing share for over two years. The SAm basis improvement lends some credibility to the rally however and funds are still short so there is room to rally further on structure alone. We may see the first condition ratings in beans Monday after and they should look as good as corn did. Many are using 1.0-2.0 million more acres than the USDA for beans and if the weather continues favorable there could be considerable downside in new crop. Middays put a ridge in the central/east in the extended maps which coincided with the bounce – hard to get too excited at this point – a little heat not a bad thing at this time of year.
Bocken Trading LLC is a licensed Commodity Trading advisor who trades agricultural commodities.