Bush League
Flying blind on June 30th
"We learn from experience that men never learn anything from experience."
— George Bernard Shaw
The June 30th Report, Quarter End, and a Few Other Comments
I can’t fathom how the USDA emerges from their meetings with the message that the data didn’t tell us anything new, so let’s move corn acres up by 5,000, and alert people to a 5 million acre possible range on June 30.
JUNE 30th!!!!! What are we doing here? There’s a word for this.
“Do you have an opinion on the market Nico? Oh yeah, I put on a 1-lot, and we’ll address it in six weeks. It might be 30 cents lower or 30 cents higher.”
A year ago, NASS took the acres from 95.2 to 98.8. Which suggests the error margin was shy of 9% with less than 4% of the crop to go. Assuming this is a linear relationship where “anything could happen” to those acres.
In the March 2026 report, they included a notice to make sure everyone was aware of the record low response rates. Then in this report, there’s additional verbiage saying that even though we only have 1.9 million acres left to plant, the miss could still be over 5% of intended corn acres.
Honestly, what was the point of this report?
While we are cutting budgets for critical agencies and education, citizens are being incentivized to sit at home and develop addictions. For context, the total amount wagered on sports in the US...
2025: $165 billion
2024: $149 billion
2023: $121 billion
2022: $93.7 billion
2021: $57.5 billion
2020: $21.5 billion
2019: $13.1 billion
2018: $6.6 billion
Yes, there is an incredibly strong, well-documented correlation between gambling and substance use disorders (SUDs). The relationship exists both at the individual psychological level and the macro-societal level.
The link is so strong that in the DSM-5 (the diagnostic manual for mental health), Gambling Disorder was officially moved out of “Impulse Control Disorders” and reclassified as the world’s first recognized non-chemical, behavioral addiction—putting it in the exact same category as substance abuse.
-Is there a clearly defined connection between sports betting, addiction, and societal ills?
Q2 Performance
An entire world of successful quant traders lack any understanding of how a stalk of corn grows or how soybean oil gets refined, yet they would never trade based on moon cycles or this type of 'research.'
Sure, Dave, the easiest 85 cents we will make in corn comes below $3.85—even though it costs about $4.40 to grow the stuff.
My turn: ‘If we can just push cotton below 70 cents again, 45 is in play.’
June is for Momo
Momentum was the unequivocal winner in June, specifically trend-following funds and momentum QIS strategies. They killed it. So did anyone staying short on weather or chasing LLM guided seasonality; it’s a fine line between the two.
It was the analysts and experts trying to bottom-pick on the hopes of a ‘China will buy’ lifeline and “we’re cheap enough” who got caught out. The most bearish input that went mostly unnoticed, however, was the massive volume of corn South America moved to the market. Impressive considering how strong US demand will finish this crop year.
Irrespective of fundamentals, it’s all about pumping financial markets for quarter-end and the July 4th holiday. What could possibly go wrong?
On to the Report… but First: Canada
This confirms even fewer wheat acres across North America due to low returns. The cash bid out of Vancouver stayed weak all spring, and canola offered a much better alternative. Barley is a lower-cost crop to grow, and this should serve as a good rule of thumb for price relationships that farmers will make adjustments.
One More Thing… I really dislike this administration’s budget cuts. This is the website at 11:02 CST.
PSA: paying people to do uneconomical tasks is what exacerbates American agriculture problems. There’s plenty of slaughter capacity, and the Big 4 have been shutting it down since last year.
I took aim at the slowing slaughter rates two weeks ago (image below), and even wrote why the price of beef won’t fall if / when cattle prices do mean revert.
If I can figure this out… You would think they can.
There were rumors circulating that the USDA will open the border in July. Others are saying this absolutely untrue. My guess is that they will be opening the border sooner rather than later because they are out of other options.
One more PSA: Screwworm is not a threat with cooked meat, and it’s going to spread either way. Let’s get on with it.
It Was Predictable
They did exactly what we predicted: made a meaningless adjustment that provides zero guidance because there wasn’t any enough credible information between April and June to latch onto. Here is the report preview: P&L Wrecking Ball.
Premiums ground higher as flat price was relentlessly sold, only to crush everyone who paid up for protection. People short puts were puking out of them minutes before the report. Take a look at the vol sell off two hours later.
What a waste of a report. Why not move the report back 30 days, and include insurance information? If farmers do not fill these out accurately, they are not eligible for direct payments.
This is NOT that hard to fix. But for the love of God, do not survey more people in May and the first half of June. Thirty-some thousand responded and we get a 5 million acre error margin that could be up, down, or different crops.
Now let’s get into where to go from here.
