Daily Ag Direction 6/17/24
Good Morning!
Weather is taking control of the market as we see red across all major grain markets. Rain showers over the weekend helped alleviate concerns in Ukrainian wheat growing areas and 25% of Southern Russia is considered too dry. Precipitation outlooks for the U.S. has major rainfall chances over the corn belt to stave off some of the concerns that heat will build into the July 4th weekend. Of the last 15 trading sessions on the KC contract, only 3 days have traded higher. Interestingly, of those 3 days, 1 was a Tuesday and two were Thursdays. We will see if tomorrow can see a rebound higher. In 15 trading sessions, volume has gone from 118k contracts to 46k contracts in open interest. The September contract is firmly more liquid as we begin to see hedges rolled on to future months. There are additional reports that the Russian freeze that sparked the market rally may not have been as bad as previously believed. There is no doubt that the good U.S. crop is also weighing on markets. It will be a weather driven market for the next few months barring some major demand or fundamental concern. Those do seem to occur every year and it will be important to recognize it when it occurs. Continue to work this marketing problem even though things seem to be heading south. At the yields many farmers have achieved there are still opportunities to make money on this wheat crop. With known yields and costs it is the easiest time of year to calculate a breakeven. There are always opportunities to reenter the market or to begin marketing next year’s crop so please reach out if you would like to know more.
July ’24 KC Wheat -20.5 @ $6.07
July ’25 KC Wheat -12.5 @ $6.51
July Corn -3.5 @ $4.47
Dec Corn -5 @ $4.65
July Beans -21.5 @ $11.58
Nov Beans -18.5 @ $11.31
Sept Feeders -0.350 @ $262.350
Aug Live -0.450 @ $182.725
Please reach out to your CEA Risk Management Advisor if you have any questions. Have a great day!