After seeing today’s acreage number, we have to ask ourselves: are we any better-off [in terms of better/improved knowledge about US 2019 plantings] than we were on Thursday night? I think the clear answer is “No”, and so it is that I suggest to you that the acreage report for corn especially is very unreliable analysis…because we see two different USDA agencies promoting two different acreage bases. I truly can’t remember a time in my career when I’ve seen such a distortion between agencies, nor have I ever seen springtime weather be so extreme. Not a good recipe if you are looking to get a handle on supplies domestically. Therefore, I am very nearly ready to recommend that we not even consider this acreage report into our fundamental baseline…and that we simply wait for 10 days to get fresh WASDE numbers. Besides, with the GFS Model still suggesting unwanted rains in the areas most saturated by this year’s weather pattern, I would consider the idea that the supply-demand fundamentals will continue to tighten (supplies shrink) the more it rains now. See the model map below. (2) On an interview with a media colleague, the major NASS data official interviewed kind of made it sound like maybe NASS isn’t factoring-in the Prevent Plant acres…again, why bother? Already on Friday, commodity traders are calling-for another poll. Don’t spend my tax dollars on it!
Is there anything to glean from the acreage report? I am glad that USDA took soybean acres down so much–even though I don’t agree with them. But it should help keep the soybeans from being the major weight or pressure on prices in the coming weeks…something this market desperately needs in my view. The pictures below represent probably over 50% of what I saw in MO-IL-IN, with the larger proportions in MO & IN compared with IL. My point: we just don’t know the crop size yet…and not even the acres. Similarly, I have spoken about how Harvested Acres & Yield will be more important this year than normal. Today’s numbers supports this mindset.
Key now will be the technical follow-through–or lack there of–as well as the US Dollar & Wheat. I am not concerned at this time about the trend shifting to a “bearish” mindset when looking at the 4-6 month horizon; maybe it will be negative over the course of the next 20-30 days if we have follow-through on Monday. But I want to see exactly how different prices are heading into July 4th holiday versus where they were last night. Note the prices heading lower toward the gap being filled in the July Corn–something I am very relieved to have seen this afternoon; and I am eager to see this gap filled as the July goes off the board. Then, the market should be much more cleaned-up in terms of technicals. I’m not trying to not make the “Sell” signal on the Weekly Stochastics not important: I’m just not ready to say that the market is done going down yet. I honestly think we need another week to get a handle on the weather and the technicals, and the results of the Trump-Xi Meeting.
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