Not much of a market reaction to the USDA numbers that were released on noon on Friday. “Judging by the market reaction, you would never know there was even a report,” said Doug Werling, with Bower Trading. He said the market is assuming that future reports will show a lower corn yield, “The corn trade is assuming that the overall yield is going to be lower than the 170.7 bpa the USDA is currently using and the carryout will be contracted also.” Domestic soybean numbers were also left unchanged, except for a reduction in soybean crush. While there were some changes in the world carryover numbers, Werling says that is not a significant factor at this point.
We also saw speculative und short covering last week that lifted prices prior to the report. Werling thinks that will continue, especially if the weather stays warm and dry, “Watch the $4 mark on July corn. That is a huge psychological mark. It the market takes it out and keeps on going, you know there is something up.” He added the $4.20 mark would be a spot to watch on December corn. The USDA put the season-average corn price estimate received by producers is unchanged from last month at $3.00 to $3.80 per bushel. The season-average price for soybeans was forecasted at $8.30 to $10.30 per bushel, and the season-average farm price for wheat is projected at $3.90 to $4.70 per bushel, up five cents from the latest report. USDA will release its U.S. acreage and grain stocks reports on June 30.
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