Dow -86.87
S&P -3.98
Nasdaq +6.00
The Dow industrials and S&P 500 fell this morning, with major indexes still on track to end the month higher despite mounting expectations for a U.S. interest rate increase. The Dow Jones Industrial Average fell 84 points, or 0.5%, to 17789. The S&P 500 lost 0.2% and the Nasdaq Composite Index gained 0.1%. That left the Dow industrials on pace to finish the month 0.1% higher, while the S&P 500 was headed toward a 1.4% May gain.
Some analysts said the monthly gains for major indexes since their climb off February’s lows was an encouraging sign for equities markets, given new concerns about increased interest rates and other global uncertainty. Expectations for the Fed to announce an interest-rate increase this summer have risen dramatically since the start of the month, while the dollar has gained for four consecutive weeks.
http://www.wsj.com/articles/european-stocks-steady-as-investors-look-to-upcoming-key-events-1464681623
July Corn -7’0 @ $4.05’6
New Corn -4’2 @ $4.09’2
July Beans -5’2 @ $10.81’2
New Beans -0’2 @ $10.56’0
Corn:
The corn made some gains recently hitting $4.13 on the July board Friday and touching it again last night during the evening trade. Happy to see the corn finally getting some attention reaching levels we haven’t seen since October ‘15. Basis continues to suffer as the board rallies and those producers that locked in basis levels have seen the benefit. Looking forward we are needing to price these basis contracts and we seem to be getting some opportunities. Be sure to place offers, we don’t want to miss out on a bounce.
I am enjoying seeing the grain prices upward move, however I remain realistic, keeping in mind if U.S. weather cooperates we could easily see a corn crop upwards of 14 billion bushels and domestic ending stocks of 2.2 billion bushels or more. I guess the moral of the story is manage your risk and hope for it to go higher.

Beans:
July beans remain fairly range bound since the bounce May 10th, but the stretch to $10.98 last week was promising. We can always hope to shoot past $11, which would provide some real potential from a technical perspective. However there are discussions regarding the switch to beans from corn, which is not necessarily bullish news for the beans. I don’t anticipate the funds care much about that however. It seems for now political risk, the US Dollar, and oil prices seem to have more impact than the actual crop does. So where do we go from here? Do markets continue to rally or do beans settle down? No one knows. As a producer it is wise to reduce risk at profitable levels. Understanding it is very easy to kick yourself when prices go higher but from a risk management perspective it’s the right move and fits the longer-term goals of a profitable operation.

So let’s talk about weather into the summer. Should we be concerned? The Weather Channel says the trend of warmer-than-average temperatures overall during summer months the last several years is expected to continue. Well-above-average temperatures are expected this summer from the West Coast into the northern Plains, Great Lakes, Ohio Valley, mid-Atlantic and Northeast.
The only area where cooler-than-average temperatures are expected this summer will be across much of Texas, Oklahoma, Arkansas and Louisiana, again, owing partially to the soaked ground from a spring of heavy rainfall.

“We expect that the full La Niña forcing will not be in place by June, but will come roaring into play by July and, especially, August,” Crawford said. “We expect a strongly ‘back-loaded’ summer with the heat continuing into September.”
Typically, La Niña summers feature hotter temperatures from the central U.S. into the Northeast.
Crawford notes that during previous years where rapid changes from El Niño to La Niña occurred, the worst of the summer heat was focused from the northern Plains to the Great Lakes states.
Another factor to consider regarding temperatures this summer are sea-surface temperatures in the western North Atlantic, which are forecast to be warmer than any time over the past five years. That often results in warmer temperatures in the eastern U.S.

Greg Mockenhaupt
ProEdge Risk Management Consultant
P: (402) 685-5613 | Greg.Mockenhaupt@cvacoop.com
1007 County Road O
Oakland, NE 68045
www.cvacoop.com
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