Corn – Ethanol will be expected lower, talk is short covering but OI does not yet support that
↓ Ethanol will be expected lower today due to recent flooding in SD/MN, last week ethanol was 1043K
↔ There was talk that recent support has been fund short covering but OI was almost unchanged on Monday and was 6K higher yesterday, neither suggest funds have anything to do with support
↔ Weather maps show solid rains and normal temps days 1 – 8, heat then moves in for ND/SD on day 9 with rains easing back, far too early to tell yet it this will be a weather issue to add support
↔ Yesterday posted an 8 AM sale of 100K to Columbia, more is needed to suggest improved demand
Beans – Bean oil may be seeing fund short covering spilling support over to beans/meal
↑ As of last week funds were at 99% of record shorts in bean oil, since Monday there have been signs of funds covering some of those shorts with open interest down a sizeable 15K on yesterday’s bounce
↑ This bean oil support is likely to add spill over support to beans again today
↔ On a comparable basis, beans are closer to its final price estimate of $11, this should slow sellers
↔ First chart resistance would be the report day high of 1125, yesterday’s high was 1124
↓ Weather maps are still likely to add pressure as well, until a sizeable weather threat is seen
Wheat – Yesterday SovEcon raised wheat production estimates, a new range might be forming
↓ SovEcon raised production 3.4 MMT to 84.1 MMT, all the fear about frost and now estimates are up
↓ Early yield reports from Russia are starting off strong which is the cause for the higher estimates
↔ It’s early to tell yet but a new range in Sep CHI might be forming from around 555 to 600
Cattle – BB still moving higher, some analysts looking for a BB pullback next week, no cash bids yet
↔ Yesterday’s PM BB was choice +1.21 Select +0.07 packer BE at 202.21, packer cushion $11.68
↓ Part of what may be causing the cautious trade is some analysts who feel BB will start setting back next week following the 4th of July holiday, we will watch that very closely next week
↑ Right now BB continues moving higher, has packer profits near $12 and in every way suggests the potential for cash at +$1 to +$2
↔ A problem with the thought that BB may slow down next week is that if end users were slowing their beef buying post July 4th we should have already seen that last week and through this week, end users typically buy 2 weeks ahead of use not 2 days, let’s just keep watching BB daily as we have been doing
↑ After yesterday’s bounce futures are still $2.50 under cash when we might expect +$2 this week