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We have arrived at yet another USDA report day, and the crowds have gathered, awaiting the release.  I have often thought, if the USDA really wanted to stage these for the most impact, the Secretary of Ag would emerge from clouds that were surrounding the USDA building with the report etched into stone tablets, ready to proclaim the “word of gov”.  While that may sound a bit sacrilegious, let’s face it.  There are many who treat these reports as the one true gospel, while others look upon them with the disdain of blasphemy, but inevitably, they smash a few golden calves each time one is released. There is one thing we can almost be certain of today, though, once the numbers have been released and we witness the near obligatory 90-seconds of insanity, the attention of the market should quickly revert to the next weather forecast.

Before we get to the big numbers today, we do have weekly export sales to chew through, and for the most part, will not satisfy the hunger of too many bulls.  For the week ending June 3rd, we sold just 189,600 MT or 7.5 million bushels of current crop year corn.  This was 64% beneath the previous week and 39% below the 4-week average.  Japan was the top purchaser with 203.7k MT, followed by China in for 66.2k, and then Colombia taking 58.2k.  Reductions from unknown of 195.7k MT offset these.  For the 2021/22 crop year, we sold a measly 26,400 MT or 1 million bushels.  Are higher prices doing their job?  Current crop year beans remained above water with net sales of 15,700 MT or 577k bushels.  The 2021/22 sales were not significantly better at 105,000 MT or 3.8 million bushels.  For that slot, Hong Kong was the top buyer with 66k MT, followed by Taiwan with 22k and then-unknown destinations in for 17k.  We cannot often say wheat sales outstripped corn and bean, but for this first week for the new crop year, sales totaled 325,900 MT or 12 million bushels.  South Korea was the top buyer with 80.3k MT, followed by the Philippines with 60.2k and then-unknown destinations taking 45k.  The only others of note last week were bean oil, which bounced back to 3,200 MT, and in livestock, we find sales of 16,100 MT of beef and 19,700 MT of pork.  Within those totals, China accounted for 2,300 MT of beef and 8,100 MT of pork.

Once again, here are the trade estimates for the June production and supply/demand report;  Brazilian corn production of 97 MMT with beans at 136.1. Argentine corn production of 47 MMT and beans 46.5.  Currently, the USDA stands at 102 and 136  for Brazilian corn and beans and 47 and  47 for Argentina. For domestic crops, the trade expects corn production of 15.009 billion from a yield of 179.4 bpa.  2020/21 ending stocks are expected to slip to 1.203 billion, with 2021/22 then coming in at 1.417 billion.  Bean production is expected to total 4.411 billion from a yield of 50.8 bpa. As a result, 2020/21 ending stocks of 122 million and 2021/22 increasing to 143.  This year’s total wheat production is estimated to reach 1.891 billion bushels, with 2020/21 ending stocks coming through at 868 million and 2021/22 at 781 million.

The first shipments this season of Argentine corn have reached Brazil, as the livestock industry in that nation tries to supplement the poor safrinha crop. But, of course, this will be the first boat for what should be many, not only of corn but wheat as well.

In the macros, we find energies higher again, metals and financial instruments under pressure, equities higher, and the dollar fractionally lower.