Not much to report since last time except that, thankfully, the market has found some support at 85 cents – for now. As we had hoped, fundamentals, most notably strong demand, has limited losses.

This is not to say we couldn’t see another smaller selloff as the July 6 tariff implementation date approaches without some sort of resolution. The spec community’s perception and subsequent reactions to the uncertainties created by all this will be key.

Open interest in December changed very little last week, which tells us any profit taking was quickly followed up with additional buying. Also, daily trading volume has decreased since the big decline indicating a lack of panic and no rush to the exits by sellers.

In addition, mills are providing support as they hastily fixed on call sales at these more attractive prices.

Not A Market For Faint Of Heart

This will continue to be a weather market and a political one, as well. Not one for the faint of heart. However, we remain cautiously optimistic that a retracement lies ahead as fundamentals rule.

Two significant reports will be released this week.

• The first is Thursday’s weekly export sales report. This will be the first week of sales following the tariff retaliation announcement by China. Though they were major buyers of new crop the previous week, we will look to see if significant cancellations are made in response to the U.S. tariffs.
• Secondly, USDA on Friday releases its planted acreage report for 2018. We don’t look for any surprises here as the market has already taken into account an increase in acres from 2017 but realizes due to current weather conditions this may not translate into additional bales.

Until next time.