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June 16th- Closing Market Commentary

June 16th- Closing Market Commentary

Grains closed high (like today’s temperature!):

July Corn + 14 1/4 cents/bu (7.88 1/4)

Aug Soybeans + 17 cents/bu (16.30 3/4)

Sept Chi Wheat + 27 cents/bu (10.90 1/2)

Cdn $ +0.00090 (77.35 cents)

WTI Crude Oil +2.28/barrel (117.59)

Despite equity markets faltering again amid persistent worries of an impending recession, grains managed to gain some footing through headlines and weather forecasts to take back some losses from earlier in the week. This was supported in conjunction by the slight USD$ decline which by extension makes U.S. commodities more competitive on the international market (better demand).

Soybeans have some support today as China announced a 0.4% increase in month-to-month sow numbers. Chinese pigs are the world’s largest consumers to soybeans, so an increase in their herd is highly positive for the global soybean demand.

In addition to the China pig story, yesterday Argentina announced that they are upping their biofuel blending percentages to combat the fuel shortage fears. It will increase to a temporary max of 12.5%. This was highly supportive of both soyoil and ethanol which helps to prop up both corn and soybeans.

As noted in the midday, rain is expected to be sparse in the Midwest over the next few weeks. That being said, temperatures are expected to subside over the weekend making the lack of rain less burdensome (for now). It is too early to make any long-term predictions on the crop’s potential as the weather forecasts continue to change. If there is one thing that is certain- it is that weather is uncertain. If the hot-dry weather does stay for a prolonged period of time, it can have adverse effects on the pollination of corn which directly correlates to yield decreases. According to World Weather, the hot-dry combo is “guaranteed to deplete topsoil moisture and induce a little stress”. This potential is enough to add some weather premium in grain prices, contributing to nearby corn futures ending the day at a 4-week high.

HIS Markit aka. Informa released their acerage estimates today and they pegged corn up 455,000 acres to 90.965 million acres, while they moved soybeans down 280,000 acres to 88.735 million.

Funds were thought to have been all buyers today. 

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