http://www.bloomberg.com/apps/news?pid=20601083&sid=aEtgUjK3mtFE

Corn acreage at 87.035 million versus an average guess of 83.961 million. Bean acreage at 77.483 versus average guess of 78.121 million. Total wheat acreage at 59.775 versus average guess of 58.243.
Overall a very bearish report for corn and wheat with beans seeing a glimmer of hope with old crop continuing to gain interest.
Calls are lower in corn and wheat with old crop beans called 10+Higher with new crop steady to moving positive.

Corn is in the early silking stage with only the far south affected. Since “they” stop reporting on emergence I have to assume its 100%…thanks USDA. Conditions continue to imporive with 72% of the crop rated as G/EX, Wow. Compare that to 61% last year. TX, MO,TN and SD garner a bit of bullish sentiment with both IL and IN worth watching. This crop is far too young to get as bearish as the market is getting. With crude at $70.00+ per barrell and front end corn at $3.80, Ethanol is printing money. Look for corn basis to slowly stage a rally as Ethanol eats up old crop reserves.

Winter Wheat continues to follow historical pace concerning harvest. Spring wheat is only 15% headed versus 26 last year and 40 on average. ND is the problem there. Winter wheat conditions remain at 45% G/EX with harvest making this a mute point. Spring wheat conditions showed a 1% decline…they’re still at 76% G/EX. Nothing bullish about that.

Soybean plantings are at 96% with the south convering for the north. IL is only 88% planted versus 96 last year and 99 on average. I know it seems small but with a sub 200 carryout there is no room for error. Emergence is in line iwth historical average. Beans are beginning to bloom in the south. Same rules apply as with corn silking;Too early to matter. Conditions showed 68% G/EX versus 67% last week. There was an overall shift of +2% into excellent. Only LA and MS garner any bullish sentiment and I mean any.

in bean oil options we have seen 4,000 BOZ 40-45 call spreads bought between 105-115. This is a bullish play with an initial cash outlay of 2.45 million. A much bigger play considering the acreage report is in a matter of days

I should sell when everybody wants it and buy when nobody does.

At the beginning of June it seemed that everyone was bullish. Money was flowing into commodities.

Now as we approach month’s end everyone is now bearish and many “weak handed” longs have either liquidated or in some cases, even gotten short.

This is possibly when one would want to buy, especially in those markets where the pressure has been the greatest. I like coffee.  Look what sugar is doing!

There are a few confusing aspects to yesterday’s report that are worth mentioning. Corn rating improve 1% week on week but lose in IL, MO and IN. States such as NC, KY and other outlying states improved. Lets look at who produces more and tell me this makes sense. In HRW over 60% of the crops in TX and OK are rated as P/VP yet ratings are above the 5-year average. This again makes no sense to me. I simply believe the world feels this crop is in better shape than it really is. This stems from an overall bearish attitude towards pricing models that are now ahead of themselves for this time of the production cycle.

The entire market took an early beating only to recover slightly and consolidate above key levels. If SX closes above 987 look for acontinued correction into tomorrow and the rest of te week. The same goes for CZ with a close  over 405.

It is scary that people thought that the world could correct itself in only a few months. Like I have said in the past this is not a normal recession and we will see peaks and valleys before a steady upward trend. The Fed will pat themselves on the back Thursday but may not give you the answers you are looking for. The S&P is showing the fear of the world by its pullback.

I will be out of the office and off the floor on Friday June 19th. I am rolling to Cincinnati to see some baseball with the men of the family for fathers day.

POLITICO
Collin Peterson, 1; Barack Obama, 0

http://www.politico.com/news/stories/0609/23874.html

By: Eamon Javers and Victoria McGrane
June 18, 2009 03:31 AM EST

As President Barack Obama began to craft his
massive Wall Street regulatory reform proposal
this year, he ran smack into opposition from an
unlikely Democratic source: guitar-playing,
cigar-chomping Rep. Collin Peterson, who
represents the nation’s No. 1 sugar beet farming
district in Minnesota.

What’s even stranger is that Peterson, the
chairman of the House Agriculture Committee, won
the financial fight and blocked a proposal that
would have destroyed a regulatory agency he
favors.

And with the release of Obama’s scaled-back
proposal Wednesday, Peterson says happily, the
administration seems to be “pretty much back in
line.”

The behind-the-scenes battle reflected the
strange power that agricultural-state lawmakers
had over the crafting of the sweeping Wall Street
reforms. It took place along a long-standing
Washington fault line: congressional prerogative
vs. executive fiat.

At issue was the administration’s proposal to
merge the Commodity Futures Trading Commission
and the Securities and Exchange Commission. The
idea wasn’t merely to do away with one set of
impenetrable Washington acronyms but, rather, to
merge the oversight of securities, like stocks
and bonds, and futures, which are contracts to
buy specific items in the future - hence the name.

Futures have long been associated with the
nation’s agrarian past, because farmers buy and
sell contracts for specific commodities like
corn, wheat or the sugar beets grown in
Peterson’s district in Minnesota.

And even though futures today are just as likely
to be currency or oil contracts as pork bellies,
they’re still regulated by the CFTC and overseen
on Capitol Hill by the Agriculture committees in
the House and Senate.

If Obama’s plan went through, the Agriculture
chairmen would lose their reach into the global
financial industry.

Enter Peterson. A conservative Democrat and
former accountant, the 10-term congressman has
been a staunch defender of agriculture interests
in a House caucus dominated by party liberals.
And this time, he took his case straight to
Treasury Secretary Timothy Geithner.

Peterson and House Financial Services Committee
Chairman Barney Frank (D-Mass.) joined with other
members of Congress on June 3 for a 7 p.m. dinner
at the Treasury Department. Peterson said
Geithner made another push for the merger.

“We made it pretty clear that we did not think it
was a good idea,” Peterson said. “Barney just
said, ‘Don’t do it.’ So, apparently, they
listened.”

“In a perfect world, I think they would have
liked to do this, but it’s not necessary,”
Peterson said of the Obama administration. “Why
pick fights that are not necessary?”

One of the reasons it would have been such an
enormous fight, say cynics, is the proposal would
mean farm-state members would lose the campaign
contributions that come with their financial
oversight authority.

After all, farmers are not the biggest campaign
contributors to members of the House and Senate
Agriculture committees. Financiers are.

In the 2008 election cycle, reports
OpenSecrets.org, financial, insurance and real
estate interests gave more than $28 million to
members of the Senate Agriculture Committee in
political action committee and individual
contributions. Agribusiness interests were
completely overshadowed, giving slightly more
than $10.6 million.
For Peterson personally, the margins were
reversed, with $542,000 coming from agribusiness
and $112,000 coming from the financial sector in
the 2008 election cycle, OpenSecrets.org said.

It was a similar picture in the House, where
finance, insurance and real estate PACs and
individuals gave more than $8 million to members
of the Agriculture Committee, while the
agribusiness industry could muster only $7
million in contributions.

But members of Congress who resisted the merger
say their gripe wasn’t about authority or
contributions but because there’s no need to
merge agencies in the midst of a crisis.

Asked why it’s a bad idea, Peterson - who has
said campaign contributions played no role in his
position on the issue - cites a previous effort
to reshape the bureaucracy in the midst of a
crisis that ended up with decidedly mixed results.

“I would have two words: Homeland Security,”
Peterson said with a laugh. “In the middle of a
crisis, you shouldn’t shake everything up for no
good reason.” More important than moving boxes on
an org chart, he said, is that the CFTC and the
SEC both adopt similar tough approaches to
regulation. “I think Barney and I were able to
convince the administration that that’s where we
should go.”

But the resistance didn’t come solely from the
House side. Asked the same question, Frank said
simply, “No sensible person would think they had
the votes to do that in the Senate.”

Still, supporters of the plan kept up the heat on
their side. On June 11, Sen. Chuck Schumer
(D-N.Y.) sent a letter to Geithner intended in
part to buck up his resolve to merge the CFTC and
the SEC. “The opportunity we have now to overhaul
our alphabet soup of regulators is once in a
lifetime and must be matched by
once-in-a-lifetime efforts by the administration
and Congress,” Schumer wrote.

But it was too late. A few days later, the
details of the administration’s plans began to
leak out to the media. The CFTC would stay in
place.

Asked by Bloomberg Television’s Al Hunt whether
competing interests stifled consolidation of
regulatory agencies, Obama said Tuesday that he’s
always intended to build off of the existing
foundation, rather than starting with a blank
sheet of paper.

“It didn’t make sense for us to create a whole
new SEC when the SEC already has some top-notch
professionals who do what they do very well,” the
president said.

And on the same day, when asked about
congressional turf fights by CNBC’s John Harwood,
the president was philosophical about what’s
doable in Washington.

“Did, you know, any considerations of sort of
politics play into it?” the president asked
rhetorically. “We want to get this thing passed,
and, you know, we think that speed is important.
We want to do it right. We want to do it
carefully. But we don’t want to tilt at
windmills.”

Obama’s willingness to bow to political reality
suggests that he wants to avoid making enemies of
legislators he’s going to need in coming years.
“It’s a good example of the kind of mistake that
was avoided because of his Capitol Hill
background,” says a financial industry lobbyist.
“A former governor would have taken the executive
approach of thinking the issue could easily be
decided through logic, persuasion and fiat.”

© 2009 Capitol News Company, LLC