Landus Cooperative Market Commentary for June 2, 2017
Friday, June 2, 2017, 8:06 AM
Submitted by: Landus Cooperative
Beans +3 to +4
Grains slightly higher this morning after a really choppy week in the markets. This roller coaster has been led by crop conditions, weather forecasts, and wheat. South American crop estimates seem to be getting larger for both corn and beans. Soybeans are looking at their 4th consecutive week of losses today. Funds are very active in the market right now; we’ll probably see some profit-taking today. Short weeks are wild ones!
Several news stories are citing Chinese soybean crushers experiencing the worst slump for margins in 33 months. We’ve heard similar stories in the U.S. for a while now. What this means to you is that if the crushers are not making expected margins, they have very few alternatives: they can slow down/shut down and take extended maintenance time; they can pay less for beans by widening their basis; they can charge more for their products (meal and oil). The most likely scenario is that they pay less for beans in the short term and do what they can about the other 2 options if possible. This can/will also have a negative effect on the futures portion of the price, as decreased usage raises the carry out. Long story, short, if you are looking for a major rally in Old Crop beans (futures or basis), the odds are slim and getting slimmer. Especially if you combine that information with the thought of potentially more bean acres in the U.S. than originally thought in March.
Looking forward, grains will still be watching this weather forecast for many key areas. We know they are wet in the East (Illinois, Indiana) and we’re sitting pretty good here in the central corn belt. South American estimates will continue to matter, along with political news. We are now in the seasonally volatile market window- more excitement to come I’m sure!
Landus Cooperative is sponsoring a Brock Associates seminar June 26th. Join us at the Wild Rose Casino in Jefferson for an afternoon of farm information from many valuable speakers. Registration opens at Noon followed by sessions on land value outlook, weather and marketing outlooks, and managing risk with marketing. Pre-Registration is free, but you need to contact us. So, just call your local Landus Cooperative location, local GMA or dial 877-778-2226 for registration details.