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Corn Outlook:
Grain futures are meeting a headwind from the ongoing trade dispute regarding tariffs with China, EU, Mexico, and Canada. China has threatened to cancel their agreement to purchase U.S. products if the U.S. implements an import tariff on steel and aluminum on June 15th. Additional challenges are being met from the growing season getting off to a great start. Last week, 78 percent of the corn crop was rated in good-to-excellent condition, down one point from the previous week. This compares to last year’s rating of 68 percent and 70 percent for the average. Without a weather threat, there is little incentive for the bulls. With the funds already sporting a long position of 1.025 BB, a bullish development is needed to whet additional interest. Looking at exports, inspections last week were 61.2 MB and are on track to exceed USDA’s projection of 2.225 BB.
Bean Outlook:
Soybeans continue to be haunted from retaliatory measures likely taken by China if the U.S. implements an import tariff on steel and aluminum later this month. The dickering between these two could be a drawn-out affair. Meanwhile, planting is approaching the finish line at 87 percent complete. The first crop rating of the season shows 75 percent of the crop in good-to-excellent condition which ties the record set in 2010. Right now, there is little for the bulls to grasp with the funds nursing a long position of 405 MB. The U.S. and China will have to do some fence mending, or inflammatory weather enter the scene for them to add to their position. Looking at exports, inspections last week were 20.4 MB. For the moment, it is a toss up as to whether USDA’s projection of 2.065 BB will be reached.
Wheat Outlook:
The rating for winter wheat fell one-point last week to 37 percent of the crop in good-to-excellent condition. However, the ratings are becoming less of a factor as harvest has begun and is 5 percent complete. Traders will monitor yield reports to see how they stack up against estimates from crop tours made earlier this spring. Dryness over the past 60 days in the Black Sea Region continues to offer broad support. Meanwhile, exports offer little inspiration with inspections last week at 12.5 MB. Looking at the funds, they have whittled their short position to a token 95 MB.
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