Free Commentary

By: Dan Hueber –

If you reside in the northern third of Illinois you might have been surprised to have awoken to higher corn and bean markets this morning.  Rather intense storms moved through this region and as I commented a week or so ago, had this been the “old-days”, rain on LaSalle Street would have meant lower prices, but those rules no longer seem to apply, thank goodness.  The weather outlooks that I have seen this morning calls for increased chances of moisture and potentially slightly cooler temperatures in the days ahead but we have seen these forecasts shift back and forth several times recently. All that said, bulls need not feel too comfortable as these markets, while higher, still remain below last week’s highs but it would appear that there is growing recognition that yields are being trimmed. By how much becomes the major question moving ahead.

While this is not meant to try and make anyone suffering with dry weather this year feel any better, I did read an interesting story this morning the could be filed in the “and you think this year is bad” category.  It turns out that it was this date in 1875 that a record swam of Rocky Mountain locusts, descended on the Great Plains.  They covered an area that was 1,800 miles long and 110 miles wide stretching from Canada to Texas.  There were reports that in some areas they would pile up a foot deep in the ground and literally ate all the vegetation in their path and then some. Leather harnesses were chewed off horses as were clothes left out on the line to dry.  Even handles on tools and fence post were chewed on.  They actually remained as a problem, albeit to a lesser extent for the next several years but eventually rain returned to the plains and today, the Rocky Mountain locust is extinct.

Bunge was in the news again overnight. Apparently, they are implementing a strategy of releasing a warning ahead of the actual release of quarterly returns in an attempt to soften a negative response to a disappointing earnings.  Obviously, it did not help much as even without seeing the actual numbers, their stock dropped over 3% in the overnight hours.  They do have a press conference for investors scheduled for today and so far have said, while still profitable, the number will be below the low end of estimates.  Investment bank, Credit Suisse believes that the odds of a potential buyout are now at 50%.

Last but not least this morning, it is Thursday which means weekly export sales and we witnessed solid numbers in all three commodities.  For the week ending July 13th, we sold 466,500 MT or 18.37 million bushels of corn.  This was three times greater than the previous week and 63% larger than the 4-week average.  Top sales were made to Japan at 263.1k MT, Mexico with 209k and Peru at 52.9k.  Beans sales totaled 409,600 MT or 15.05 million bushels of beans.  On the top of the list we find unknown destinations with 123k MT, followed by Mexico with 81.1k and then China for 71.8k.  Note as well that for the 2017/18 crop year we have sales of 1,522,000 MT.  Of this, 1.3 MMT to China was announced last week in the daily reporting system.  Finally, wheat sales came in at 669,500 MT or 24.6 million bushels.  This was 87% higher than last week and 52% above the 4-week average.  Number one on the lost was the Philippines with 164.9k MT, followed by South Korea with 88k and then Mexico who also purchased 88k.