Morning Grain Update

6/10/2015 7:00 AM CST

www.standardgrain.com | (312) 462-4438

USDA will release their monthly Crop Production and WASDE report this morning at 11:00am
CST. While the report certainly has the ability to move the markets, many traders will take the
estimates with a grain of salt. Given that the supply side of the corn and soybean balance sheets
hinges greatly on July and August weather patterns, any updated production estimate on todays
report is meaningless even by USDAs own logic. USDA stated in their May report that 90% of corn
yield variability is determined by July weather patterns. Most view todays report as a placeholder ahead of the more pivotal June 30th Acreage/Stocks report.
USDA Pre-Report Estimates
14/15 US Corn Ending Stocks:
15/16 US Corn Ending Stocks:
14/15 World Corn Ending Stocks:
15/16 World Corn Ending Stocks:
14/15 US Soybean Ending Stocks:
15/16 US Soybean Ending Stocks:
14/15 World Soybean Ending Stocks:
15/16 World Soybean Ending Stocks:
14/15 US Wheat Ending Stocks:
15/16 US Wheat Ending Stocks:
15/16 World Wheat Ending Stocks:
2015 All Wheat Production:
2015 All Winter Wheat Production:

1.865bil vs. 1.851bil last month

1.772bil vs. 1.746bil last month
192.7mmt vs. 192.5mmt last month
192.4mmt vs. 191.9mmt last month
341mil vs. 350mil last month
483mil vs. 500mil last month
85.9mmt vs. 85.5mmt last month
96.2mmt vs. 96.2mmt last month
714mil vs. 704mil last month
794mil vs. 793 mil last month
202.4mmt vs. 203.3mmt last month
2.095bil vs. 2.087bil last month
1.47bil vs. 1.378bil last year

The corn market attempted a rally early yesterday but ultimately finished the day near
unchanged. Futures have been able to hold recent gains this week. The market may continue to add
weather premium ahead of pollination, barring a bearish surprise on todays report. There has
been increased farmer selling of old crop corn on the recent rally. There is fear that both basis
levels and futures could decline during July if weather cooperates. The old-timers here at the
CBOT (there are very few left) generally prefer to short the corn market ahead of the 4th of July
holiday due to the strong bearish seasonal/historical tendency of the market to move lower during
pollination. A significant weather issue during July, of course, would result in a rally.
The bean market has held together nicely during recent sessions. Demand for old crop beans
continues to outpace projections. The July board crush again surged to new multi-year highs and
is within a few cents of the all-time highs that were posted in 2013. Processors have huge
incentive to bid-up for cash soybeans and will likely continue to do so as long as margins are
good. The new crop supply situation is projected to remain burdensome as long as weather
cooperates during the month of August in particular. Global soybean fundamentals remain hugely
negative, as stocks/use ratio and world ending stocks are projected to balloon to record highs
again in 15/16.
Wheat futures continue to push higher. The large speculative short in the market is clearly
concerned about production here in the US. US winter wheat harvest is running behind schedule due
to excessive rainfall throughout the US Plains. Crop ratings have dropped off in recent weeks and
may continue to decline. There is concern regarding the world production situation and weather
issues in the EU, Russia, Canada, India, and Australia. Still, traders look for generally
bearish numbers on todays report.

The information contained herein is the opinion of the writer or was obtained from sources cited within the update. It should be noted that
the impact on market prices due to seasonal or market cycles and current news events may be reflected in market prices. Trading in futures
products entails significant risks of loss which must be understood prior to trading and may not be appropriate for all investors. The IB
or its affiliates may act as, among other things, an investor, research provider, placement agent, underwriter, distributor, remarketing
agent, structurer, securitizer, lender, investment manager, investment adviser, commodity trading advisor, municipal advisor, market maker,
trader, prime broker or clearing broker. Please note that Standard Grain, Inc. may have personal financial interest (both now or in the
future) in the market(s) discussed in this report.