Tropical Depressions In Gulf & Southwestern Atlantic. The Corn & Ethanol Report

We kicked off the day with Retail Sales MoM & YoY, Retail Sales Ex Autos MoM, and Retail Sales Ex gas/Autos MoM at 7:30 A.M., Redbook YoY at 7:55 A.M., Industrial Production MoM & YoY, Manufacturing Production MoM & YoY, and Capacity Utilization MoM & YoY at 8:15 A.M., Business Inventories MoM, Fed Barkin Speech, and Retail Inventories at 9:00 A.M., NY Fed Treasury Purchases 0 to 1 yrs. at 9:30 A.M., Fed Collins Speech at 10:40 A.M., Fes Kugler Speech, Fed Logan Speech, and 20-Year Bond Auction at 12:00 P.M., Fed Musalem Speech at 12:20 P.M., Fed Goolsbee Speech at 1:00 P.M., Net Long-term TIC Flows, Foreign Bond Investment, and Overall Net Capital Flows at 2:00 P.M., and API Energy Stocks at 3:30 P.M.

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The US weather is stagnant until June 26, Rain soaks N Plains/Upper Midwest, Heat & Dryness forecasted in the East. The Central US forecast is consistent with previous runs. Details depend on Gulf storm activity, but the major forecasting models agree that a steady pattern of heavy rainfall continues throughout the next 10 days across NE, the Dakotas, MN, and WI. Heat, dryness, and rapid soil moisture loss impacts the E Midwest and Delta Southeast. Corn & soybean growth rates will be deflated in the N Plains & Upper Midwest – where dryness and heat are now desired. Heat in much of the E Midwest is not an issue today, but it’s duration of this pattern needs watching. Unfortunately, Gulf/Atlantic warmth guarantees active tropics, which confidence is low in long range outlooks. The EU model maintains high temps in the low 90s occur each day this week east of the Mississippi River. Highs in the upper 90’s are forecasted in MO, IL, IN, KY, and OH this week. Operational models later this week will begin to peak into the opening days of July. Watch temp forecasts closely. Soybeans Fall on Technical Selling, CBOT soybean futures were lower to start the week on the technical selling and unexpected weekend rains. The Crop Progress report showed the national soybean planting progress advanced to 93% complete, 2% ahead of the 5-Year Average. 82% of the crop has emerged against the average of 79%. National good-to-excellent crop conditions ratings slipped 2 points for the week to 70%, but well above last year’s 54%. The top-rated crop was in LA at 88%, followed by NE at 79% GD/EX. IL and NC tied with the lowest-rated crops at 61% GD/EX. A year ago, IL was only 33% GD/EX. Some parts of IL caught unexpected weekend rains, but the 10day forecast is hot and dry for the crop growing areas east and south of IA. Next support is at $11.50 July, with crop ratings expected to fall another 2-4 points in the week ahead. On the Corn Front, CBOT corn extends correction, Central US weather remains rather mixed, chart-based selling continued after July fell through the 50- and 100-day moving averages on Friday. There’s also a broad ‘rain makes grain’ mentality with respect to coming soaking precipitation across the N Plains/Upper Midwest. However, heat/dryness are what is desired in key parts of the Northern US, and Ag Resources (ARC) views N American climate in late June as Chaotic. More focus will be placed upon heat east of the Mississippi River if it continues beyond the next 10 days. The US crop on Sunday was rated at 72% GD/EX, vs. 74% the previous week and vs. the longer term average of 69% in mid-June. The crop in IL fell 9 points to 76 GD/EX. The IA crop is up 1 point at 74%. ARC expects the national GD/EX ratings to drop 3-4 points next Monday amid heat in the east. Central US weather drives hourly/daily price discovery into late July. ARC cautions against turning bearish on breaks as unlike a year ago, a record yield is needed to offset sizable losses in Brazil and disease in Argentina.Livestock operations are recommended to begin scaling into additional coverage below $460, Dec.

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