Today’s Grain Future

Corn futures saw a sharp drop in the nearby July contract today, but unwinding of bull spreads did support the new crop months. December was UNCH after bouncing from the 2012 low at $5.12. A few elevators are already switching their cash bids from July to September out of fear that a short squeeze will develop in the July. Others are being patient because index fund roll selling typically puts some pressure on the contract at the end of the month and in early June. Planting progress has been slowed by rain in some areas, but the trade focus is switching toward yield and gradually away from acres.

Jul 13 Corn closed at $6.40, down 9 1/2 cents,
Sep 13 Corn closed at $5.46 3/4, down 7 3/4 cents,
Dec 13 Corn closed at $5.20 1/4, unch,
Mar 14 Corn closed at $5.31 1/4, up 1/4 cent

Soybean futures closed lower, with the exception of nearby July. Meal futures are rising due to reduced US production and continued strong export interest. That has buyers chasing the old crop bushels in the cash, but also aiming for July futures delivery. Fearing a repeat of the May delivery process (no deliverable receipts available), the shorts are covering. Consulting firm Safras & Mercado cut its projection of Brazilian production to 82.5 MMT today. That is smaller than the USDA May estimate, but still 22% above last years crop. Oil World is projecting that US soybean imports this year will be 32 million bushels including the usual imports from Ontario and some from South America.

Jul 13 Soybeans closed at $14.78 1/4, up 13 3/4 cents,
Aug 13 Soybeans closed at $13.90 1/4, down 3/4 cent,
Sep 13 Soybeans closed at $12.88, down 6 1/4 cents,
Nov 13 Soybeans closed at $12.20 3/4, down 4 1/4 cents,
Jul 13 Soybean Meal closed at $438.70, up $3.40,
Jul 13 Soybean Oil closed at $49.48, up $0.28

Wheat futures were lower in KC and Chicago, but July Minneapolis wheat settled 2 ¼ higher. Slow spring wheat planting progress is now threatening to result in further switches to corn, or potentially prevented planting claims. There is also a popular seasonal spread trade that buys MPLS against Chicago due to expected harvest pressure in the latter while spring wheat likely won’t be harvested until late August or September. Given wet current conditions and a wet 6-10 day forecast for the northern US, there are concerns about getting the last 30% of the crop in the ground. Japan is tendering for 122,222 MT of milling wheat this week, of which 67,897 MT is specified US origin white, HRW and DNS wheat.

Jul 13 CBOT Wheat closed at $6.80 1/2, down 4 3/4 cents,
Jul 13 KCBT Wheat closed at $7.38 1/2, down 6 1/2 cents,
Jul 13 MGEX Wheat closed at $8.13 1/2, up 2 1/4 cents