A TALE OF


2 MARKETS Before the United States Department of Agriculture’s (USDA) May 10 Crop Report, managed funds had a near record short position in grains. With total open interest also almost a record.


 soybean carryout by 100 mil bu to 995. This is due to lower exports. This was bearish. USDA estimated  last year. This would suggest a crop of 4,150. USDA  113.1 mmt. USDA raised world crop 2 mmt, lowered crush 2 mmt and exports 4 mmt. USDA dropped   is estimated near 355.6 mmt vs 362.1 for this year.


The USDA also increased US 2019/20 US corn carryout more than expected. USDA increased US  due to lower ethanol use. USDA estimated US 2019  would suggest a crop of 15,030. This suggests a US   326.0 mmt. USDA estimated world 2019/20 corn 


 275.0 mmt. USDA estimated world 2019/20 wheat  2019/20 wheat is estimated near 777.5 mmt vs 731.5 this year. USDA also estimated the US 2019 all   bu to 1,127. This is due to lower feed and export use.  


Figure 1: CBOT Grains – COT – Disaggregated Futures and Options Managed Money – Net Positions - Number of Contracts


Annual GDP (YoY) Forecast Cut from 3.5% forecast in January


Source: Hightower Report CFTC Max: 672,042 (8/21/2012) -Min: -538,727 (4/30/2019) -Most Recent: -525,026 (05/07/2019)


Chart 2: US Corn Percent Planted - Select States 100


10 20 30 40 50 60 70 80 90


0 10 Yr Avg Source: Hightower Report USDA data


On May 13, USDA estimated US corn and soybean planting pace is  farmers who can plant corn add to intended acres given that corn prices  USDA’s May estimates and farmers in the wet area could be unable to plant corn. Some feel US corn acres could drop 3-4 million from intentions. Lower yield and acres could drop US 2019 corn crop 1.0 billion bushels.


Traders will now have to decide what is more important, higher world 2019/20 supplies or US weather and the potential for a lower corn crop.


Steve Freed  


Last Current Most Recent: 30% on 05/12/19


6% 5 4 3 2 1 0


10 | ADMISI - The Ghost In The Machine | May/June 2019


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