Bigger-than-expected corn stocksJune 1 corn stocks: 5.224 billion bu., up less than 1% from last year. Of the total, 3.03 billion bu. (58%) were stored on farm and 2.2 billion bu. (42%) were off farm. Third quarter 2019-20 indicated disappearance was nearly 20% lower than last year at 2.73 billion bushels.

June 1 soybean stocks: 1.386 billion bu., down 22% from last year. Of the total, 633 million bu. (46%) were stored on farm and 753 million bu. (54%) were off farm. Third quarter indicated disappearance was 869 million bu., down 8% from the same period last year.

June 1 wheat stocks: 1.044 billion bu., down 3% from last year. Of the total, 232 million bu. (22%) were stored on farm and 812 million bu. (78%) were off farm. Fourth quar-ter 2019-20 indicated disappearance was 372 million bu., 28% below from the same period last year.

Implications from June 30 reports USDA’s updated old- and new-crop balance sheets on July 10 will incorporate the June stocks and acreage estimates.

Corn stocks were 273 million bu. higher than expected, implying third quarter feed use was weaker than antici-pated and old-crop ending stocks will be near 2.2 billion bushels. While corn acreage came in well below expecta-tions (see News page 4), new-crop ending stocks will still be projected up sharply from the current marketing year.

Soybean stocks were 6 million bu. lower than traders expected, suggesting USDA may publish a negative old-crop residual use estimate, signaling the 2019 crop will be revised higher in September.

Ethanol data points to lower corn useCorn-for-ethanol use was nearly 300 million bu. in May, up 18% from April but down 31% from last year. Through the first nine months of 2019-20, corn-for-ethanol use totaled 3.638 billion bu., down 9.4% from the same period last year. Weekly ethanol production continues to improve, but the rise has slowed and is not at a level to hit USDA’s 2019-20 estimate of 4.9 billion bushels. Our estimate is now 50 million bu. below USDA’s.

Corn, beans surge — USDA’s shocking 5-million-acre drop in corn plantings versus March intentions (see News page 4) pushed corn futures to their highest level since late March as funds actively covered short positions. Soybeans surged to their highest price since early March. While strength could continue if hot, dry forecasts verify, the selling opportunities are too good to pass up. Spillover support firmed wheat futures in the face of harvest. Cattle futures strength-ened but the trend remains sideways. Summer- and fall-month hog futures dropped to new lows as traders removed more premium from the market. As you celebrate Independence Day, take a moment to reflect on the principles the United States were founded on — that all people are cre-ated equal and we have freedom of speech, religion and assembly. God bless America.

Hot, mostly dry post-holiday forecastThe bulk of the Corn Belt will see above-normal temps and limited rainfall through July 11. Key will be where the high pressure ridge develops and how long it persists, which will determine where the hottest temps will be and which states receive some rains. Weather models suggest slightly cooler temps and some rainfall could develop July 12-18.

U.S., China tensions mountingThe U.S. postponed flights for dozens of diplomats who planned to return to China and is preparing to roll out long-delayed sanctions over human-rights abuses in China. One China watcher told us if China’s Communist Party media starts attacking President Donald Trump it will sig-nal the relationship “has really gone off the rails.” As we’ve said before, if Trump senses he’ll lose his re-election, he could crank up actions against China.

Covid-19 flare-ups raise concernsWhite House Health Adviser Dr. Anthony Fauci says the coming weeks are “critical” in how the country addresses the surge in Covid-19 cases. Fed Chair Jerome Powell told Congress the U.S. economy has rebounded faster than expected, but warned challenges remain with the pandemic.

G4: A potential new pandemicChinese researchers are warning that a “G4” strain of

H1N1 affecting Chinese pigs has become more infectious to humans and has “all the essential hallmarks of a candi-date pandemic virus.” Fauci says U.S. health officials are keeping an eye on the new strain of flu that has character-istics of the 2009 H1N1 virus and 1918 pandemic flu.

Jobs growth greater than expectedThe U.S. economy added a record 4.8 million non-farm payolls and the unemployment rate dropped to 11.1% in June. While the June jobs data was better than expected, there are questions about future reports as some high-population states like Florida, Texas and Arizona have reversed or slowed reopening plans.

News this week...2 — Strong corn, soybean ratings heading into July.3 — Higher corn, bean price forecasts through year-end. 4 — Planted corn acres fall well short of March intentions.

July 4, 2020 Vol. 48, No. 27

Go to ProFarmer.com

July 4, 2020 / News page 2

Follow us on Twitter:@ProFarmer@BGrete

@ChipFlory@JWilson29

@DavisMichaelsen@MeghanVick

Fewer Canadian spring wheat acresStatistics Canada estimated Canadian all wheat plantings at just shy of 25 million acres, which was a bit lighter than expected but still up 366,500 acres (1.5%) from 2019. Spring wheat plantings totaled 17.9 million acres, down 900,000 acres from March intentions and year-ago. Durum plant-ings topped expectations at nearly 5.7 million acres, up from 4.9 million acres last year.

StatsCan raised its canola planted acreage estimate a bit from March intentions to 20.8 million acres, which was slightly higher than anticipated but around 178,000 acres below 2019. Barley plantings topped expectations, climbing roughly 100,000 acres from 2019 to 7.5 million.

“The increase in durum wheat area is attributable to favorable prices and low carryout stocks from the previous crop year,” according to MarketsFarm Editor Mike Jubinville. High carryin stocks likely limited acres planted to spring wheat. “Areas of crops such as canola and soy-beans fell compared with 2019, possibly due to a shift away from oilseeds,” Jubinville says.

Consultant raises Brazil corn crop pegSouth American Crop Consultant Dr. Michael Cordonnier raised his Brazilian corn crop estimate by 2 million metric tons (MMT) to 98 MMT, citing a rise in safrinha corn acre-age in top producer Mato Grosso. “It appears farmers in the state switched some of their intended cotton acreage to safrinha corn,” he explains. And rains during late May and June for southern Brazil raised yield prospects for some of the latest-planted safrinha corn.

Ukraine may limit wheat exportsUkraine’s economic ministry proposed limiting wheat exports to 17.2 MMT for 2020-21. But there are questions about how strictly any restrictions would be followed as the country capped 2019-20 wheat exports at 20.2 MMT in March and it allowed shipments to reach 20.5 MMT. Ukraine’s government and grain traders union said last week they won’t determine the volume of grain exports for 2020-21 until August.

Brazil shipping lots of beans to ChinaBrazil exported 13.75 MMT of soybeans in June, a 61% surge from year-ago levels. Industry group Anec says China has accounted for 72% of Brazil’s soybean exports in the first half of this calendar year. Anec expects Brazil to ship 6.48 MMT of soybeans in July and raised its Brazilian export forecast for 2020 by 5 MMT to 78 MMT.

Brazilian corn exports fell to only 348,100 metric tons in June amid tight supplies. But Anec expects corn shipments to reach 3.9 MMT in July as safrinha crop supplies will be available.

Corn, soybean crop ratings improveUSDA rated 73% of the corn crop as “good” to “excellent” as of June 28, a one-point improvement from the previous week. USDA also raised its “good” to “excellent” rating for the soybean crop by one point to 71%. Only five percent of the corn and soybean crops were rated “poor” to “very poor,” both unchanged from the prior week.

When USDA’s weekly condition ratings were plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop improved 3.5 points to 382.6 points and the soybean crop rose 3.3 points to 373.3 points. The corn crop is 8.5 points above the five-year average for the end of June, while the soybean crop is 13.7 points above normal.

U.S. spring wheat ratings drop againUSDA slashed the amount of spring wheat rated “good” to “excellent” by six points to 69% as of June 28. The portion of crop rated “poor” to “very poor” increased by two points to 6%. The spring wheat CCI rating dropped another 7.8 points to 370.1 points. The spring wheat crop has dropped 21.7 points the past three weeks but is still 2.5 points above the five-year average for the end of June.

Texas cotton continues to sufferUSDA increased its national “good” to “excellent” rating for the cotton crop by one point to 41%. But in Texas, the portion of crop rated “good” to “excellent” declined two points to only 21%, though the “poor” to “very poor” rating improved four points to 36%. On our weighted CCI, the crop improved 1.8 points to a 333.7 rating, though that is still 20.3 points below the five-year average.

Drought concerns expandThe U.S. Drought Monitor showed drought/dryness now covers 85% of Indiana, 13% of Ohio (mostly in the northwest), 30% of Illinois (most of the southern third), 16% of Iowa (mostly west-central), 47% of Minnesota (mostly the northern two-thirds), 24% of Nebraska, more than half of Kansas, 13% of Missouri (far western) over half of South Dakota (western) and mostly the western two-thirds of North Dakota.

The updated July forecast from the National Weather Service calls for elevated chances of above-normal temps across all but the northwestern corner of the country. There’s a dry bias for the southwestern Corn Belt, “equal chances” for precip in the central Midwest and elevated odds for above-normal precip in the northwestern Corn Belt.

July 4, 2020 / News page 3

ACTUAL DOANE FORECASTS*YearAgo

LastWeek

ThisWeek Aug. Sept. Oct.-

Dec. (Monthly & quarterly avg.)

CORN Central Illinois, bushel 4.36 3.19 3.05 3.35 3.30 3.25 Omaha, NE, bushel 4.39 3.21 3.05 3.35 3.30 3.25 Dried Distillers Grain, IA, $/ton 132.50 125.17 119.63 -- -- --SOYBEANS Central Illinois, bushel 8.55 8.64 8.48 8.60 8.55 8.50 Memphis, TN, bushel 9.00 9.08 8.97 9.10 9.00 9.00 Soymeal, 48% Decatur, ton 321.20 288.50 285.80 295.00 297.00 300.00WHEAT Kansas City, HRW, bushel 4.81 4.48 4.41 4.75 4.80 4.90 Minneapolis, 14% DNS, bushel 6.50 6.79 6.29 6.50 6.50 6.50 St. Louis, SRW, bushel 5.72 4.96 4.84 5.00 5.05 5.15 Portland, Soft White, bushel 4.81 5.75 5.73 5.80 5.85 6.00 Durum, NE MT HAD, 13%, bu. 4.77 5.75 5.75 5.75 5.50 5.50SORGHUM, Kansas City, cwt. 7.32 6.46 6.44 6.75 6.75 6.50COTTON, 11/16 SLM, 7 area, ¢/lb. 60.28 55.86 56.12 61.00 61.00 61.00RICE, nearby futures, cwt. 11.14 14.02 13.45 13.00 12.75 12.50BARLEY, MT, G.T., malting, cwt. 8.87 7.50 7.50 7.50 7.50 7.50OATS, Minneapolis No. 2 heavy, bu. 3.05 3.36 3.59 3.50 3.20 3.10ALFALFA, NW Iowa, lg. sq. prem., ton 185.00 135.83 123.75 135.00 135.00 130.00SUNFLOWERS, Fargo, ND, cwt. 17.52 19.45 19.75 19.00 19.00 18.50HOGS, Nat’l carcass 51%-52% cwt. 72.90 43.43 42.81 48.00 45.00 47.00FEEDER PIGS, 40 lbs., Nat. avg, head 54.04 14.80 14.25 18.00 20.00 30.00CHOICE STEERS, feedlots, cwt. 111.28 100.78 96.21 100.00 105.00 110.00FEEDER CATTLE, Oklahoma City

Steers, 700-800 pounds, cwt. 139.00 133.84 125.44 130.00 135.00 140.00Steers, 500-550 pounds, cwt. 162.00 147.96 148.75 155.00 160.00 165.00Heifers, 450-500 pounds, cwt. 142.70 135.85 134.05 135.00 137.50 140.00

COWS, utility, Sioux Falls, SD, cwt. 64.76 65.27 67.49 68.00 70.00 70.00MILK, Class III, CME spot month, cwt. 16.27 20.99 20.93 19.00 18.00 16.00LAMBS, Slg., San Angelo, TX, cwt. 124.50 130.00 131.00 -- -- --ENERGY

Ethanol, IA, gallon 1.52 1.23 1.21 -- -- --Farm diesel, U.S., gallon 2.50 1.47 1.47 1.60 1.67 1.71

*Average prices expected for the indicated time periods based on available information. Forecasts will be revised as necessary to reflect changing market conditions. Diesel prices are from Inputs Monitor.

Producer Crop Comments...Please send crop comments to editors@profarmer.com.

Allen Co., (northeast) Indiana:“We only received a half inch of rain — not nearly enough. Crops are suffering. Need a multi-day soaker.”

Harrison Co., (south-central) Indiana:“Corn will tassel around July 8. We have plenty of mois-ture with more on the way ahead of tasseling.”

Carroll Co., (north-central) Indiana:“Drove to Pana, Illinois (south of Decatur), and back on June 30. Got drenched while there and on the way home. Got within six miles of home and the dirt was bone dry.”

Mills Co., (southwest) Iowa:“Only received 0.3 inch of rain. Earliest corn will tassel shortly after the Fourth of July. Soybeans remain behind.”

Northwest Minnesota:“There are some tough-looking fields along Highway 2. Spring wasn’t easy in this area but crops are fighting.”

Adams Co., (south-central) Nebraska:“Corn is shoulder-high and beans are rapidly growing. Ground remains hard, making pivot water difficult to soak in. We’re running pivots slower to keep the plants cool.”

Lancaster Co., (east-central) Nebraska:“Still trying to recover from storms, with plenty of beat up corn and soybeans.”

Doniphan Co., (northeast) Kansas:“Drove from St. Joseph, Missouri on Highway 36 then up I-57 through Illinois and then I-94 to Ann Arbor, Michigan. Corn and soybeans are at least two weeks behind the entire route.”

Sedgwick Co., (south-central) Kansas:“Finishing up planting double-crop soybeans. There should be enough moisture to get them up. Corn is tasseling and could use a drink.”

Red River Valley, North Dakota:“Our corn is waist-high before the Fourth of July and looking good.”

China bans most Dutch porkBeijing halted pork imports from four of the Netherlands’ largest slaughter plants, which provide the bulk of the country’s shipments to China. The move is thought to be linked to outbreaks of Covid-19, though there is no scientific evidence indicating the virus can be transmitted via food or packaging materials. Dutch pork exports to China totaled 299,000 metric tons in 2019.

China pork prices stay highChinese pork prices dropped 13.9% in May, but remain well above year-ago lev-els. Beyond Meat is entering grocery stores in mainland China as an alterna-tive to pork due to domestic shortages.

China’s factories expandChina’s official purchasing managers index (PMI), which gauges mostly large, state-run factories, rose to 50.9 in June from 50.6 the previous month. Production and new orders rose, suggesting increased domestic demand, but export orders continued to contract. China’s Caixin/Markit PMI, which gauges smaller, private-owned factories, rose to 51.2 in June, the highest reading since December before the Covid-19 out-break. But demand remained subdued, as many manufacturers are still struggling with reduced or cancelled export orders.

July 4, 2020 / News page 4

Wow! USDA’s June Acreage Report was full of sur-prises. USDA estimates total acres planted to the

19 principal crops at just 311.9 million acres, down 7.2 million acres from March intentions. Principal crop acres are estimated to be down 8.8 million acres from the 2011-2018 average and aside from 2019, the fewest since 1972.

Corn acres shockingly low versus March intentionsUSDA estimates corn planted acres at 92.0 million

acres, down almost 5 million acres from March intentions and 3.2 million acres less than the average pre-report trade estimate. Whereas March planting intentions were above every single pre-report forecast, actual June plant-ings were below all pre-report estimates. USDA noted there were still 2.2 million acres of corn yet to be planted when its survey work was completed on June 16.

USDA estimates harvested corn acres at 84.023 million acres, 91.3% of planted acres, which is close to average.

Compared with March intentions, USDA lowered corn plantings in all of the top 12 production states aside from Wisconsin. Farmers in Wisconsin indi-cated in USDA’s June sur-vey work they planted slightly more acres to corn this year than originally intended.

Soybean acres not up as much as expectedUSDA estimates soybean planted acres at 83.8 million

acres, up 315,000 acres from March but around 900,000 acres below expectations. USDA noted there were still 12.2 mil-

lion acres of soybeans left to be planted when its survey work was finished. USDA estimates harvested soy-bean acres at 83.020 million acres, 99.0% of planted acres.

Compared with March intentions, USDA raised soybean plantings in Arkansas, Indiana, Iowa, Kansas, Michigan and

Wisconsin. Soybean acres were unchanged from March intentions in Minnesota and Ohio. USDA lowered its plant-ed soybean acreage versus March intentions in Illinois, Missouri, Nebraska, North Dakota and South Dakota.

Combined corn, bean acres down sharply from MarchUSDA estimates combined corn and soybean acres at

175.8 million acres, down 4.7 million acres from March intentions but up 10 million acres from last year. Combined corn and soybean acres are estimated to be down around 300,000 acres from the 2014-2018 average.

Other spring wheat acres down, durum up from MarchUSDA estimates other spring wheat acreage at 12.200

million acres, down 390,000 acres from March intentions and 351,000 acres below the average pre-report trade esti-mate. USDA estimates farmers in top producing North Dakota planted 6 million acres to spring wheat, down 100,000 acres from March intentions. Farmers in Montana planted 3 million acres to other spring wheat, down 300,000 acres from March intentions.

USDA estimates durum planted acres at 1.5 million acres, up 210,000 acres from March intentions and 187,000 acres higher than traders anticipated.

USDA’s all-wheat acreage estimate was a record-low 44.250 million acres, down 405,000 acres from March and nearly 500,000 acres less than traders anticipated. USDA lopped 225,000 acres off winter wheat plantings.

Cotton seeding well below expectationsUSDA estimates all cotton plantings at 12.185 million

acres, down 1.518 million acres from March intentions and roughly 1 million acres less than traders expected. USDA’s June survey work showed farmers in Texas only seeded 6.615 million acres to cotton this year, down 447,000 acres from what they intended in March. That would be the smallest area planted to cotton in the top production state since 2016.

Sorghum acres down slightly from March intentionsUSDA estimates farmers seeded 5.62 million acres to

sorghum this year, down 200,000 acres from what they intended in March. Kansas’ sorghum acres are estimated at 2.75 million acres, down 50,000 acres from March. Sorghum plantings in Texas at 1.7 million acres are down 100,000 acres from March.

Corn, cotton acres surprisingly lowby Editor Brian Grete and Sr. Market Analyst Jeff Wilson

News alert and analysis exclusively for Members of Professional Farmers of America® 402 1/2 Main St. Cedar Falls, Iowa 50613-9985General Manager Joel Jaeger • Editor Brian Grete • Editor Emeritus Chip Flory • Sr. Market Analyst Jeff Wilson • Chief Economist Bill Nelson

Washington Policy Analyst Jim Wiesemeyer • Digital Managing Editor Meghan Vick • Inputs Monitor Editor Davis MichaelsenSubscription Services: 1-800-772-0023 • Editorial: 1-888-698-0487

©2020 Professional Farmers of America, Inc. • E-mail address: editors@profarmer.comFarm Journal CEO, Andrew Weber

Corn acreage changes fromMarch Prospective Plantings

Change Mil. Ac.Illinois -400,000 10.9Indiana -400,000 5.4Iowa -100,000 14.0Kansas -200,000 6.1Michigan -200,000 2.3Minnesota -300,000 8.1Missouri -100,000 3.5Nebraska -700,000 9.8N. Dakota -800,000 2.4Ohio -100,000 3.6S. Dakota -600,000 5.4Wisconsin +100,000 4.0

Soybean acreage changes fromMarch Prospective Plantings

Change Mil. Ac.Arkansas -50,000 2.95Illinois -100,000 10.4Indiana +300,000 5.7Iowa +100,000 9.4Kansas +300,000 5.3Michigan +100,000 2.3Minnesota 0 7.4 Missouri -200,000 5.6Nebraska -100,000 5.0N. Dakota -600,000 6.0 Ohio 0 4.8S. Dakota -200,000 5.2Wisconsin +100,000 2.05

Feed MonitorFEED

Corn Game Plan: We have advised going hand-to-mouth on corn-for-feed needs. The rebound in prices has pushed prices beyond fair value, barring a sustained weather threat.

Meal Game Plan: Livestock producers should have all soybean meal needs cov-ered in the cash market through July. We will wait for the next pullback in prices to extend meal coverage.

Corn III’20 0% IV’20 0% I’21 0% II’21 0%

Meal III’20 33% IV’20 0% I’21 0% II’21 0%

Analysis page 1

$317.30

$304.10

DAILY AUGUST MEAL

$310.10

DAILY AUGUST LEAN HOGS

Position Monitor

HOGS - Fundamental AnalysisNearby futures fell to new lows to start the week before finding support. Hog supplies will remain burdensome into August. Pork cutout values fell to the lowest since mid-April but demand remains active as consumers are boosting use of more attractively priced pork in at-home meals as restaurant traffic remains slow. Open interest jumped last week, a sign of Chinese pricing after suspending imports from Danish and Brazilian plants. Prices must close above the downside gaps after the Hogs & Pigs Report on June 26 to signal the bearish news has been exhausted. Stronger pork prices and cash bids will lead rallies in July.

Game Plan: Futures have dis-counted weaker pork prices as gro-cer demand improves. Better China imports will signal a low is near. We’ll evaluate hedges after the next rally.

CASH CATTLE ($/CWT.)

CASH HOGS ($/CWT.)

Position MonitorGame Plan: We are will-ing to keep all risk in the cash market at this time. The current oversupply situation will improve early in the fourth quarter.

Feds Feeders III’20 0% 0% IV’20 0% 0% I’20 0% 0% II’21 0% 0%

A close above $101.90 may target weekly resistance near $108.00.

Initial support is at $95.45. Stronger support is at $86.75.

Initial resistance at the steep downtrend near $53.00 is backed

by the 40-day moving average (green line) near $55.00.

Initial support is the contract low at $47.525. Weekly chart support is at $44.35 (not shown).

DAILY AUGUST LIVE CATTLE

$101.90

CATTLE - Fundamental AnalysisDaily slaughters are back near normal and heavy weights continue to keep meat supplies abundant. Cash bids slumped another $2 to $3. Choice cutout values fell to the lowest level since early March, generating stronger wholesale business. Retailers report improving sales and some ran beef features for the Independence Day holiday. Better demand during normal sluggish summer months would support the product and cash markets. Better exports would add to cash market stability. The supply of cattle will fall by September and the fourth quarter price outlook is stronger given the drop in spring placements.

$57.90

$296.50

$95.45

$86.75

$62.30

July 4, 2020ANALYSIS

Lean Hogs III’20 0% IV’20 0% I’21 0% II’21 0%

Initial resistance is at $296.50.Strong resistance is at $310.10.

Initial support is the 40-day moving average (green line) at $288.80. Stronger support is the contract low at $283.30. $283.30

$47.525$47.525

July 4, 2020 / Analysis page 2

$5.12$5.07

$5.42 1/4

$4.79 1/2

DAILY DECEMBER SRW WHEAT

WHEAT - Fundamental AnalysisSRW - Prices followed corn higher on USDA’s smaller wheat planting forecast but failed to break resistance. That signals the market does not have a bullish supply story. However, watch the dry, warm conditions in the Black Sea region and too much rain for European harvest for bullish news.

Position Monitor

Game Plan: We will wait for extended price recoveries to increase cash sales. It will take new threats to world crops to lift prices. Hedgers should maintain a 20% short posi-tion in December SRW futures.

Initial resistance is at $5.07 and $5.12. Stronger resistance is the 40-day

moving average (green line) near $5.15 and the June high

at $5.42 1/4.

Initial support is the contract low at $4.79 1/2. Weekly chart support is at $4.70 and $4.60 (not shown).

CORN EXPORT BOOKINGS (MMT)AVERAGE CORN BASIS (SEPTEMBER)

CORN - Fundamental AnalysisFutures surged to three-month highs on lower U.S. planted acres and hot, dry weather forecasts into mid-July. USDA’s shocking acreage estimate (see News page 4) increased the importance of weather on yields, triggering a flurry of short-covering by funds, which came into last week holding the largest short bets for this time of the year. Ethanol production gained a ninth straight week, but the expansion slowed. Falling ethanol inventories means output will track gasoline consumption, but blending slowed last week. China shipped old-crop U.S. corn last week and USDA’s daily reporting service confirmed three more cargoes sold for new-crop delivery on July 2. But more sales are needed.

Initial resistance is at $3.80 3/4.

Initial support is at $3.59. Strong support is at $3.38 3/4.

DAILY MARCH CORN

$3.59

$3.38 3/4

$3.80 3/4

DAILY DECEMBER CORNPosition Monitor

Game Plan: On June 29, we advised all producers to sell 10% of 2019-crop in the cash market. On June 30, our orders to sell another 10% in the cash market were triggered and we advised hedgers and cash-only marketers to sell another 10% of expected 2020-crop production via cash-forward contracts for harvest delivery. We also cancelled all prior sales orders. Make sure you use this rally to get current with sales recommendations.

Initial resistance is at $3.69. Strong resistance is at $3.80 1/2.

Initial support is prior resistance at $3.47. Stronger support isthe April low at $3.25 1/2.

$3.47

$3.25 1/2

$3.69

$3.80 1/2

’19 crop ’20 crop

Cash-only: 100% 30% Hedgers (cash sales): 90% 30% Futures/Options 20% 20%

’19 crop ’20 crop

Cash-only: 100% 40% Hedgers (cash sales): 100% 40% Futures/Options 0% 20%

July 4, 2020 / Analysis page 3

DAILY SEPTEMBER HRS WHEATDAILY DECEMBER HRW WHEAT

HRW - Harvest reports from Kansas show protein levels increasing in the western area but low test weights trimmed yields. Dry weather should aid harvesting into mid-July. Export sales were light and new business needs to develop to increase price support. However, overseas export values trailed gains in U.S. futures last week.

$8.87

DAILY NOVEMBER SOYBEANS

HRS - Spring wheat lagged gains in the winter wheat contracts after rains fell in parched areas of the Northern Plains and Canadian Prairies with more in the July forecasts. Canadian farmers planted slightly less wheat than expected this year but higher yields will offset the drop in acreage. Cash basis was mixed with strength continuing for high protein supplies.

$8.36 3/4

$9.00

Downtrending resistance is near $5.41.

Initial support is at $5.13 1/4.

The downtrend is near $4.75.

Initial support is at $4.51.Stronger support is at $4.37 1/4.

$4.51

$9.23 3/4

$5.13 1/4

Initial resistance is at $9.00. Strong resistance is at $9.23 3/4.

Initial support is at $8.87. Stronger support is the uptrend line near $8.59.

SOYBEAN EXPORT BOOKINGS (MMT)AVERAGE SOYBEAN BASIS (AUGUST)

WHEAT EXPORT BOOKINGS (MMT)

AVERAGE WHEAT BASIS (SEPTEMBER)

SOYBEANS - Fundamental AnalysisSoybeans followed corn higher as reduced U.S. corn acres did not result in a large increase in soybean plantings from the March survey. The Midwest will be drying down the next two weeks, with an occasional shower. Current crop conditions are above average, with mostly adequate soil moisture, but rains will be needed by mid-July in several areas. Forecasts after the Independence Day weekend will be key to price direction heading into the July 10 USDA supply and demand updates. Export sales have been modest, with Chinese buying focused on new-crop delivery since most of its needs are already covered through August via record imports from Brazil.

Initial support is the 40-day moving average (green line) and trendline near $8.58. Stronger support is at the lower trendline at $8.46.

Position Monitor ’19 crop ’20 crop

Cash-only: 95% 20% Hedgers (cash sales): 95% 20% Futures/Options 0% 0%

Game Plan: On June 30, our orders were trig-gered to sell another 10% of 2019-crop for both hedgers and cash-only marketers. We also ad-vised everyone to sell an initial 20% of expected 2020-crop production via cash forward-con-tracts for harvest delivery. Make sure you are current with advised sales. We intend to make more new-crop sales on additional near-term price strength.

DAILY AUGUST SOYBEANS

$8.96 1/2

$9.21 1/2

Initial resistance is at $8.96 1/2. Stronger resistance is at $9.21 1/2.

July 4, 2020 / Analysis page 4

’19 crop ’20 cropCash-only: 100% 10% Hedgers (cash sales): 100% 0% Futures/Options 0% 25%

75.61

Annual Pro Farmer Crop Tour The 2020 Crop Tour is set for Aug. 17-20. You can receive our exclusive updates and reports online and on the new Pro Farmer app.

USDA WASDE ReportUpdated supply & demand outlook.

FRI 7/1011:00 a.m. CT

5

USDA Crop Production ReportFirst spring wheat crop estimate.

FRI 7/1011:00 a.m. CT

4

USDA Export Sales ReportWaiting for more China business.

THUR 7/87:30 a.m. CT

3

USDA Crop Progress ReportCorn, soy ratings may improve.

2

USDA Export Inspections Corn shipments may slow.

MON 7/610:00 a.m. CT

1

WATCH LIST

MON 7/63:00 p.m. CT

to 15.124 billion bu. as yields rise to a record 180 bu. per acre based on the cur-rent high USDA crop ratings.

Reduced use in the March-to-May quarter reported last week trimmed our 2019-20 corn use forecast. Even with less acreage than expected, 2020-21 carry-over will still rise to 2.6 billion bu., up 400 million bu. from this year. The stocks-to-use ratio will remain at a 16-year high and projects an average cash price of $3.25.

These rallies should be rewarded because Brazil is ready to expand both corn and soybean acreage again next year. Also, uncertainty remains about U.S./China relations and there may not be a Covid-19 vaccine until 2021.

Corn prices jumped last week after USDA shocked the trade with its esti-mate of much lower-than-expected U.S. corn planted acreage. Soybeans followed on a smaller increase in plantings.

We rewarded the rallies by increasing both old-crop cash corn and soybean sales, pushing new-crop corn cash for-ward contracts to 30% of expected pro-duction and advised forward cash con-tracting an initial 20% of expected 2020-crop soybean output for harvest delivery.

The surprise 5-million-acre cut in corn acreage to 92 million acres means new-crop output will be smaller than project-ed earlier, but carryover inventories will still rise to the highest in 33 years.

We estimate corn production may rise

By Sr. Market Analyst Jeff WilsonFROM THE BULLPEN

Shipping: The Baltic Dry Freight Index, which tracks rates for ships ferrying dry bulk commodities, posted its biggest monthly gain on record in June.

The index surged 257% last month on a pick-up in Chinese imports of iron ore in capsize ships that carry 170,000 metric tons (MT) of commodities following the easing of Covid-19 lockdowns in many countries. Iron ore supplies in China had fallen to three-year lows.

GENERAL OUTLOOKThe panamax subindex, which fol-

lows ships that carry coal and grain car-goes of 60,000 MT to 70,000 MT, gained 67% in June after China imported record quantities of Brazilian soybeans.

The average daily panamax cost rose to $11,315 to close June, up from a four-year low in February of less than $5,000 per day. While still below the $18,000 per day paid in September, rising freight costs can slow global grain buying.

DAILY DECEMBER COTTON

Game Plan: Hold short hedges in Decem-ber futures to cover 25% of expected 2020 production. Plan to make cash sales on rallies into the 62¢ to 65¢ area.

Position Monitor AVERAGE COTTON BASIS (OCTOBER)

COTTON - Fundamental AnalysisPrices rallied to more than three-month highs after USDA estimated cotton plantings fell to 12.2 million acres. Worries about demand linger with a second wave of Covid-19 outbreaks and states backing off reopening plans that may limit clothing demand.

COTTON EXPORT BOOKINGS (’000 BALES)

MONTHLY BALTIC DRY FREIGHT INDEXSurging freight rates maycurb commodity demand in the second half of 2020,if the global recovery falters.

Initial support is at 61.14¢.Stronger support at the 40-day

moving average (green line) near 59.00¢ is backed by

horizontal support at 56.44¢.

Strong resistance is at 65.80¢.

56.44¢56.44¢55.11¢55.11¢

61.14¢61.14¢

65.80¢65.80¢

2,5182,518

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