Grains tanked to close out the day:
July Corn – 40 cents/bu (6.33)
Dec Corn – 40 cents/bu (5.32 1/2)
July Soybeans -118 3/4 cents/bu (13.29 3/4) ßLargest daily decline in history
Nov Soybeans -89 1/2 cents/bu (12.56 3/4)
July Chi Wheat – 23 3/4 cents/bu (6.39)
Cdn $ -0.00570 (80.955 cents)
WTI Crude Oil -1.11/barrel (71.04)
Soyoil really took a hit today and it is bringing down the entire soybean complex. Soybeans had extended limits today ($1.50), and they abused that power as they surpassed their regular $1 threshold. Limits will be expanded again tomorrow to $1.50 (thanks to soyoil), and corn limits with expand to $0.60. Wheat was the only commodity to hold some ground as it fell only 23 ¾ cents in comparison.
The bearish soybean story revolves around the recurring headline that the U.S. may be relaxing biofuel blending policy requirements in gasoline which would decrease the need for soyoil (and ethanol). The potential collapsing of demand has futures in a frenzy with traders selling off, and money markets accentuating the drop.
Also pressuring the grains today, the U.S. dollar index pushed to a 2-month high after the Federal Reserve’s FOMC set hawkish tone on U.S. monetary policy. A stronger dollar makes U.S. grains more expensive on the world market, when purchased in non-U.S. currency. This is bad for the export markets, and is causing the trade to question the future export demand on top of the uncertainty of the ethanol and soyoil demand.
The export sales report was released this morning for the week ended June 10th. Net sales were within expectations, and the report was uneventful overall, and definitely not enough to bull up the market.Marketing year corn export sales to date exceed the seasonal pace needed to hit USDA's target by 43 million bushels, down from 63 million the previous week. Marketing year soybean export sales to date exceed the seasonal pace needed to hit USDA's target by just 2 million bushels, down from 13 million the previous week.
This morning the USDA confirmed the sale of 135,000 tonnes of soybean meal for delivery to the Philippines in 2020/21. Looks like they are buying the dip.
Drought continues to grow in the U.S. Rains are forecasted for much of the Midwest which should help combat the dry temperatures. Rain makes grain. This does not support the market’s need to ration demand which is helping the futures prices to fade.
Funds are thought to be all sellers today.