Commodity markets fell on Tuesday, grains/oilseeds between about 4pc and 8pc, as the US returned from holiday. The US dollar strengthened a little.

International

Ag markets opened back up to a bloodbath last night with the first trading session of the week in the US bringing collapses across the grains complex – Chicago wheat was down 26 3/4¢, KC -35.5¢, Minny -45.5, and Matif -2.25€ on the earlier close. Corn was off forty cents (limit) and beans -95 1/4¢ (Matif -16€, Winnipeg -$30 limit).  Macros were also off sharply with crude oil back nearly two bucks to $73.4 WTI / $74.5 Brent and the DOWN down 209 points.  The USD index has picked up slightly to 92.5, with the AUD at 74.9¢, the CAD $1.246, and the EUR $1.182.

The disagreement within OPEC over future production increases helped crude oil contracts kick higher early before the sell-off. There are no indications yet as to when talks will resume again.

Coming back from the long weekend to improved weather maps certainly did a job on the boards overnight, but the question here is whether the sell-off is justified, or a buying opportunity.  As always it takes two sides to make a market, and there’s plenty of ongoing debate about whether we’ve hit the peak for the summer on row crops or whether the overall S&D tightness will end up seeing row crops firm back up from this sell off.

Somewhat wetter and cooler weather maps for the central/northern Corn Belt over the weekend took some pressure off of immediate yield concerns. The latest weather runs are giving a solid 3″ for most of Iowa/Illinois/Indiana this week as we start to head into pollination.

Expanded limits will apply on row crop contracts for tomorrow’s trading; corn up to sixty cents and beans up to a buck fifty.

USDA next crop production and WASDE reports will publish on 12 July.

The weekly crop conditions report was released after the market closed for the day. It had been delayed a day by the holiday weekend. The corn crop was rated 64pc good-to-excellent (G/E), unchanged, beans 59pc G/E was down 1pc and spring wheat at 16pc G/E was down 4pc compared with previous week.  Milo/sorghum crop conditions were rated 72pc G/E. Winter wheat harvest progress was reported 45pc complete, up from 33pc last week.

The regular weekly export inspections reports, also delayed by the weekend, had 1.2 million tonnes (Mt) corn exported, 0.2Mt beans and 0.26Mt wheat.  There were no milo boats reported, only some overland tons to Mexico.

Black Sea weather maps still have a few more showers forecast across parts of Ukraine and a little bit of southern Russia, but otherwise the forecasts are still skewing warmer/drier across the next two weeks as harvest ramps up.

Australia

Local markets saw wheat/barley very quiet yesterday, bids just a touch softer, though they are looking to be under some pressure today with the board collapse.

Canola took a hit to the nose yesterday with the board moves, down some A$20-30/t track price, and expecting more weakness today.

Old crop cash markets remain firm with prompt needs popping up to fill export and domestic sales.

WA rains starting to push to an inch in parts of the Midlands as the storm moves inland.  BOM forecasts still calling for accumulations of a solid inch across the wheat belt, between yesterday/today’s rains and this weekend’s forecast second wave.

Source: Lachstock Consulting