Early Market Talk July 7, 2020

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Overnight markets under pressure with poor price performance yesterday in corn and arguably less threatening weather. Soybeans also under pressure after making a new high for the move yesterday helped in part by additional Chinese soybean purchases.

At 0630 CU20 trading off 3 ½¢ at $3.43 with SQ20 off 2 ½¢ at $8.96. volume totals of corn at 63K corn and 31K soybeans. Chi and KC wheat a ½ and 1 ½¢ higher.

Dow futures off 191 points at 25,988. Crude trading 36¢ lower at $40.27. US $ Index showing some modest strength.

Weekly crop condition report showed corn rated 71% G/E and a 2-point drop from last week and 15 points better than a year ago this week. Iowa and MN at 85% G/E. Soybean G/E rating nationally at 71% unchanged on the week. IA and MN 84 and 83% G/E.

Updated with CFTC data, we now have Funds holding a net corn short of 189K after selling 12K yesterday. Long a net 77K soybeans.

Soybeans filled an open chart gap left between $8.99 ¾ and $8.84 ¾ back on March 6th.

No corn or soybean deliveries.

Continue to look at the 2017 corn chart for some perspective on potential price action. Cutting a national leverage corn yield to 175 (currently 178.5) still leaves stocks more than adequately supplied and current price overvalued. Lot of growing season ahead, however.

Reminded that often the best time for producer sales is when it’s most uncomfortable to do so.

Pressure this morning on arguably less threatening weather.

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