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Grains Mixed to Lower

Grains are mixed to lower. SN is unchanged and near 8.76. CN is down 1 cent and near 3.32. WN is down 2 cents and near 4.79. US stocks are lower. US Dollar is lower. Crude is marginally lower. Gold is higher.

The US Midwest 6-10 day forecast has both models indicating rains to get going again across the region by the end of next week. The 11-16 day outlook sees ridging to dominate most of the pattern across the central US, producing above average temps and below average precip in all of the Midwest.

Corn futures have seen a slow 7 week rally due to short covering. Some link this to higher US domestic basis due to slow farmer selling and uncertainty over US July weather. July weather remains key t final corn prices. Some feel forecast could suggest that final US corn yield could be above 180 bpa. This could suggest corn futures may be near season highs. Fact China may turn a buyer of US corn could be supportive but there will be strong competition for non-China US corn exports. Weekly US corn crop ratings could drop 1 pct from last week 70 pct good/ex.

Soybean futures are making 4 week highs due to China buying US soybeans. On June 30, USDA will update US June 1 stocks and acres. Most look for stocks to be below last year. Acres could be above USDA March guess. Higher acres and above trend yield could send futures lower. Weekly US soybean crop ratings could remain near 72 pct good/ex with crops in west improving and east declining.

Wheat futures continue to slide lower. Increase north hemisphere harvest has turned Managed funds into net sellers. Fact China may buy US wheat offers support. Tightening Europe and Black Sea old crop balance sheet also offers support. Slow start to global wheat trade is not helping prices. US winter wheat harvest should be near 32 pct done versus 30 average. Ratings should remain near 50 pct good/ex. Spring wheat rating should remain near 81 pct good/ex.

On Friday, Managed funds were net sellers of 2,000 contracts of SRW Wheat; net bought 5,000 Corn; bought 4,000 Soybeans; net sold 2,000 soymeal, and; bought 3,000 Soyoil. We estimate Managed Money net short 43,000 contracts of SRW Wheat; short 259,000 Corn; net long 33,000 Soybeans; net short 50,000 lots of Soymeal, and; short 1,000 Soyoil.

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