Weekly Market Summary June 15, 2018
Friday, June 15, 2018, 3:06 PM
Submitted by: Landus Cooperative
Corn down 1.75c, down 16.5c on the week
Soybeans down 21.75c, down 63.75c on the week
If you were going to write home about any week in the markets, this last week would not be choice #1. A plethora of issues are swirling the drain at the moment, not least of which is tariff actions between the U.S. and China. The Trump Administration announced $50 Billion worth of tariffs to be imposed on imported Chinese goods. The Chinese government promised retaliation almost immediately. Friday afternoon, China announced an equal number of tariffs on U.S. imported goods, of which agriculture products are included. The Chinese tariffs are slated to be in place by July 6th. If fund managers were looking for any reason to liquidate long soybean positions, this was that reason. In the last 2 weeks, fund managers have sold long corn positions down over 150,000 contracts. They have also sold off nearly 100,000 contracts of soybeans. With the funds likely sitting in “net short” territory, we wait to see how short they are willing to go. If most take posture of “wait for the dust to settle,” the majority of the damage is probably done. However, we are a long way from “record short” territory; the question is “who wants to step in and be a futures buyer?”.
The fuel to this selloff has been good weather across the U.S. breadbasket with continual and consistent rain events. Central Iowa was hit was up to 6” of rain yesterday, casting doubt on the age-old-addage of “rain makes grain.” Nonetheless, the trade is struggling to find any bids as most view the current crop is safely harboring a record yield performance. The big question of final planted acres still remains as we await the June 29th report. It’s a good week to have in our rear-view mirror.
Stay low, keep your feet moving.