Brooks Schaffer Market Report for Friday June 7

This is the Market Report with Brooks Schaffer of Palmetto Grain. Reach him at [email protected] or 843-540-4540.

Corn and beans were long overdue for a bounce and finally showed some life on Thursday. Corn closed close to the highs finishing up 12 on the July and soybeans were up 22 cents finishing back at 12. The funds have sellers of corn now that the crop is mostly planted and condition ratings are above average. Beans have come under pressure with ideas that some late acres may get switched to beans. We are seeing wide ranging estimates of the losses in Southern Brazil but the rain has at least stopped so there is not more damage being done. 

Funds were big sellers of corn this week despite decent demand news this week. Export inspections were at the very upper end of the range on Monday. On Wednesday, we got weekly ethanol stats showing ethanol demand well above expectations and ethanol stocks being drawn down further. And on Thursday, the export sales were also at the very top end of expectations. USDA is going to have to raise exports, ethanol and maybe feed demand for corn. That will tighten up carryin at least a little bit and right now, every little bit helps. 

Soybeans were the leader to the upside on Thursday. November beans closed at $12 on Friday and by Tuesday were trading around $11.50. It does not take long to see a 50 cent move in beans. The spark on Thursday was some regulatory changes in Brazil to close a tax loophole for soybean products. The idea is that it will shift some demand to Argentina and hopefully the US and out of Brazil. There was also a port strike announced in Argentina. It is only supposed to last for 48 hours in protest over an expired collective bargaining agreement but every bit helps. Soybeans have been weak as the market anticipates a shift of some acres to beans but now I think some market participants are growing concerned the last acres in Minnesota and North Dakota may not be able to be planted at all. 

Wheat has worked lower most of the week. There are still major production issues in Russia, but those have become old news. Wheat harvest is progressing in Kansas and though the Plains and yields are running above expectations. India is still going to be a major importer this year so there are going to be some adjustments to the balance sheet. 

Next week we will get updated crop condition ratings for corn after the later planted acres have emerged. We will also get the first condition ratings for soybeans. On Wednesday we will get USDA’s updated supply and demand estimates. Market is looking for USDA to increase corn demand. The market will also be looking for USDA to lower Brazilian production estimates for corn and beans. USDAs estimates are still significantly above CONAB’s.