The calendar, the weather man, and the bean counter are all fighting for attention in the market this week. So far the weather man is winning.
Fundamental news in the form of USDA acreage reports and grain stocks reports hit the market the end of the week. The news was termed “bearish” for corn and beans, but so far these numbers mean nothing compared to the view out the window at dry ground.
The high is happening now
Meanwhile, traders are watching the calendar, which says that most years the high is in by now. Today, Monday as this is written, the high does not appear to be in.
Corn and beans are trading sharply higher as we watch the electronic trading on the Chicago Board of Trade. The September corn futures are up 22 1/4, at 6.50 3/4. Sometime last night we touched a new high of 6.57 1/2. November soybean futures are at 14.46 3/4, with a new high of 14.55 3/4.
The September wheat futures are at 7.66, with a new high of 7.44 3/4.
This is happening as the axiom is either that the high is in June, or the high is by the fourth of July. Take your pick. Both will have happened by the time this is read.
It is rare to have a high later, as the high is made on fear of the unknown. This usually happens before the worst damage is known.
Windshield observations
That there is serious damage is evident with a little driving. Travels with Squeeze this weekend got me south of Cincinnati to the National Cookie Cutter Collectors‘ Convention. (Some days, ya just hafta be a good husband. I can report that the collectors, as expected, are of mature age and fairly round.)
I can also report that the corn in southwest Ohio is at a critical stage. Sunday, July 1, the corn was trying to tassel, and showing moisture stress in almost all fields. One upland field north of Xenia looked ready for the brush hog, but mostly the corn looks better than I expected.
That will not be true for long, as it is too hot and too dry. One staggering statistic I have heard is that corn in pollination at 100 degrees can lose five bpa a day.
Weekend storms
Severe storms moved across the Midwest over the weekend, but I have not heard of any significant, widespread rain. The wind damage came with light rain. My son has no electricity on the north side of Columbus, but south of town that is not true. Consequently we were able to fill up with German food at Schmidts in German Village on the way through.
USDA reports
USDA now reports acreage of corn and beans higher than the average trade guesses, but we are not trading acres this week. USDA say we planted 76.08 million acres of soybeans and 96.405 million acres of corn. The trade average guess was 75.58 million and 95.96 million acres. This was not a huge change, but it was in the bearish direction.
Grain stocks were a mixed bag, with the corn stocks down a little, but beans up. The trade expected left over corn at this point of 3.182 million bushels, but there are only 3.15 million.
This could be a number to trade, and may be reflected in today’s gains, but I think we are mostly trading weather.
The bean stocks were actually higher than expected. We have 0.667 million bushels, but the trade expected only 0.64 million.
So, watch the weather and consider this a selling opportunity. All old-crop grain should be gone, but sell any that you were still gambling on.
The farmers will tell me they are afraid to sell the new crop because of the dry weather. Close your eyes and sell anyway. This is the chance.
* * *
On a personal note, my own cookie cutter collector stopped to see the grandsons in Columbus on the way down. Harrison is old enough for cookies, and Squeeze got permission from his dad to try one. He was not interested until Dad had some, then he tried his first cookie ever. Soon he had goo in both hands and was stuffing them in. Squeeze got pictures, and I said the caption should be, “First one’s free!”
