The Weekly Basis will be sent to you Sunday mornings from now on.
July agriculture options expire today. Typically, that means weak futures prices, but it is reasonable to think these markets have seen enough weakness since last Friday. The 8 to 14 day weather forecast has above normal temperatures for all crops except those close to the Great Lakes with above normal rainfall for every field west of the Indiana/Illinois line. It is safe to say that rain is priced into current prices. There are enough very dry areas that, if all that area does not get the expected rainfall, corn and bean prices will scream to new highs that first week of July. At least half of the market opinions are that the fear of recession is hurting commodity prices more than the rainy forecast. Rain the first week of July does not make a crop.
Given the Acreage and Grain Stocks report are on Thursday, we will see short covering before then. It is also reasonable to think futures prices will be smartly higher today since it is the end of the week and traders like to even-up at the end of a week. However, Roger said yesterday he guaranteed a rally by the close today. Nothing is 100% in this business and Roger knows better than to say something that stupid.
Andrey Sizov (SovEcon) reports Russia’s southern region is harvesting a tremendous barley with a yield of 7.4 mt/ha (136 bushels per acre), which is 19% more than last year’s decent crop. The barley comes off before the wheat and it is a reliable indicator of wheat yields. Winter wheat harvest is in July and 70% of Russia’s wheat is winter wheat. Sizov last week predicted a record large 89 million mt Russian wheat crop.