ACI Market Update 6/12/2020
Jun 12, 2020
A total snoozer of a USDA report where the WASDE showed very limited changes to balance sheets – they took down corn production in ND on old crop due to the fact some still have not been harvested and they modestly reduced ethanol grind. The resulting 20/21 carryout remains extremely large but that is nothing new and the market doesn’t seem to be all that concerned. Limited moves in the Soybean complex – lower stocks in Argentina and slightly higher US crush than anticipated. Not much feature on Wheat in the US, but you had production increases in the World, primarily in India and that is why Kansas City HRW Wheat got hit so bad after the report yesterday. Going forward we have weather and we have the end of June acreage report as far as the catalysts for any type of price change.
So far action today is pretty much wheat recovering from getting shellacked yesterday and corn and beans just trying to stay out of the way from the volatile macro world. USD slightly firmer on the day and firmer on the Brazilian Real which has weakened to 5.07 currently. While it doesn’t seem like the Brazilian farmer is participating in this little of a change, we need to watch currencies very closely in the next few months.
Basis continues to firm on soybeans as exporters attempt to cover short positions. Chinese continue to make PNW soybean purchases for October/November. Corn basis is also trending narrower in this area as the trade begins to realize the number of acres that remain unplanted.
Timely rains were seen in the last weeks in many areas, including our own. However, the remnants of the Cristobal tropical storm did bring some devastating totals to some areas. US drought monitor looks like the prior week but did show conditions worsening in Western North Dakota.
Looking forward the forecast looks much calmer with the GFS (left) and European (right) model disagreeing on totals we will see in the next week. Grains were supported on Friday as the European model turned very dry for the week ahead. As of late, the Euro has proven to be more accurate.
Recipe of the week
- 3 cup rhubarb (chopped)
- 16 oz. Can of pink lemonade
- ¾ cup sugar
- 16 oz lemon-lime pop
- 3 cups water
Cook together on stove top until soft. Strain the rhubarb.
Cool. Pour into container & freeze.
Scoop into glass, add beverage of choice (Sprite, Malibu Rum, or Vodka)
Grain Team – Aaron, Connor, Dallas, Hank, Jenna, Joel, and Kevin