TOP STORIES:
Corn Drops as Favorable Weather Lifts Supply
Corn for July delivery fell 1.3% to $3.28 1/4 a bushel on the Chicago Board of Trade Monday as warm and wet weather in the U.S. Corn Belt allowed large corn crops to continue strong growth.
Corn futures dropped Monday with traders reacting to a weather outlook supporting a record size corn crop. "With a bearish weather forecast over the next two weeks, it will be difficult to find aggressive new buyers given the sluggish demand tone," said RJO Futures. In general, the 8-to-14 day outlook shows a wet and warm trend in the U.S. Corn Belt, the firm says. Additionally, corn demand's prospects still appear to be volatile, with ethanol usage still well down from where it was at this time last year.
Grain Futures Drop as Attention Shifts to New USDA Reports -- Market Talk
09:05 ET - Grains traders are positioning for two reports that the USDA will publish at the end of the month, says Karl Setzer of AgriVisor. "This week's trade will bring us elevated positioning for the long-awaited June acreage revisions and quarterly stocks data," says Setzer. Both of these reports, due out June 30 at noon, are expected to show some shifting by farmers from planting corn to planting soybeans. However, it will likely not be enough to convince grains traders that this year's corn harvest will make supplies burdensome, Setzer says. "It is not out of the question we could see corn acres decline and the number would still be bearish for futures," he says. Overnight, corn traded down 0.6%, while soybeans fell 0.2% and wheat fell 0.4%. (kirk.maltais@wsj.com; @kirkmaltais)
STORIES OF INTEREST:
Soybean Export Inspection Hit Lowest in Over Two Months -- Market Talk
12:06 ET - Export inspections of US soybeans are at their lowest levels in over two months, the USDA says. Inspections of soybean exports totaled 254,929 metric tons, well off from last week's figure of 435,469 tons and even more off from 731,812 tons at this time last year. For a market relying on hype of increased Chinese buying to keep futures prices afloat, the report is bearish news. Even so, soybean futures on the CBOT are up 0.3% Monday, with the grains industry still expecting bigger sales figures out of China and elsewhere. "The world now needs to turn to the US for the next 6-7 months," says Jim Sutter of the US Soybean Export Council. (kirk.maltais@wsj.com; @kirkmaltais)
Brazil Economists Slightly Less Pessimistic in Weekly Survey -- Market Talk
0857 ET - Brazilian economists were slightly less pessimistic in a weekly survey carried out by the country's central bank. The median forecast was for gross domestic product to shrink 6.5% this year, compared with the previous week's forecast for a contraction of 6.51%. It was the first time in 19 weeks that the forecast didn't decline and the first time since January that it improved. The median forecast for inflation at the end of this year moved to 1.61% from 1.6%, while the forecast for the central bank's benchmark lending rate, the Selic, at the end of this year was unchanged from last week, at 2.25%. The bank's monetary policy committee last week cut the Selic to a record low of 2.25% from 3%, and indicated it's willing to cut again at the next meeting, in August. (jeffrey.lewis@wsj.com)
THE MARKETS:
Livestock Finish Lower -- Market Talk
15:34 ET - Livestock futures on the CME finish lower, with August lean hog futures down 3.2% at 51.1 cents a pound, and August live cattle futures of 0.3% at 95.125c. For hogs, a continued sluggish demand has caused supplies to build up. Meanwhile, Friday's cattle on feed report from the USDA showed more cattle on feed and higher cattle placements, meaning despite Covid-19 closures of meatpacking plants, cattle production is coming back online quickly. "The June cattle on feed report surprised trade with higher cattle numbers," Karl Setzer of AgriVisor says. (kirk.maltais@wsj.com; @kirkmaltais)
