Written Commentary
Morning Grain Outlook
Grains are mixed. SX is up 4 cents and near 9.46. CU is down 1 cent and near 3.43. WZ is unchanged and near 5.50. KWZ is unchanged and near 4.73. IA weather forecast remains dry. Brazil drops Ag import tax. Imports could help drop record high prices. US stocks are higher. US Dollar is lower. Crude is higher. Gold is higher.US equity, financial and commodity markets are trying to adjust to US Fed new policy concerning inflation targets.
For the week, SRW Wheat prices are up roughly 15 cents; HRW up 17; HRS up 12; Corn is up 17 cents; Soybeans up 40; Soymeal up $7.00, and; Soyoil up 185 points. Crushing margins are down 5 cents at $0.93; Oil share is up 1% at 35%.
Chinese Ag futures (January) settled up 28 yuan in soybeans, down 10 in Corn, down 11 in Soymeal, up 124 in Soyoil, and up 70 in Palm Oil. Malaysian palm oil prices were up 61 ringgit at 2,741 (basis November) at midsession following rival veg oils.
The 6 to 10 day forecast for the Midwest have turned mixed with the models. The European model sees little rainfall in the western part of the region with only light amounts in the rest of the Midwest. The GFS favors light to moderate rainfall for parts of MN and IA and most of MO as well into the Ohio River Valley with light amounts elsewhere. Temps begin to fall to below average in the western Midwest and average in the east for most of next week.
The 11 to 16 day forecast for the Midwest has a bit less than average rainfall for the region and below average temps. Both models are indicating temps dipping close to 32 degrees for parts of MN, IA, and the eastern Dakotas around Sep 8th.
Soybean futures continue to advance of concern about US weather and steady China buying. China new crop sales ae near 12.5 mmt, unknown IS 6.7 mmt and 1.5 mmt has been sold since the report. Assuming 158 mil bu unshipped old crop sales are rolled forward, US new crop export commit is near 950 mil bu or 45 pct of USD goal. Brazil prices are cheaper than US Feb forward. Higher soybean future could encourage Brazil farmers to add to already record soybean acres.
US corn futures are higher on concern about US corn crop size. Funds have liquidated out of there net corn position. China new crop corn sales are near 6.4 mmt with 1.6 mmt sold since the report. Assuming that 75 mil bu of old crop unshipped sales are rolled forward total new crop commit is near 24 pct of US goal. 3.60-3.65 CZ could be strong resistance as US harvest near.
Wheat futures rallied and followed higher Matif and Russian wheat prices. Both EU and Russia farmers are reluctant sellers of cash. Black Sea wheat export demand is improving. Wheat futures are near key resistance.
Preliminary Open Interest saw SRW Wheat futures down roughly 6,400 contracts; HRW Wheat down 2,400; Corn down 15,500; Soybeans up 4,500 contracts; Soymeal down 4,500 lots, and; Soyoil up 2,400.
There were no changes in registrations—Registrations total 95 contracts for SRW Wheat; ZERO Oats; Corn ZERO; Soybeans 23; Soyoil 2,632 lots; Soymeal 511; Rice ZERO; HRW Wheat 47, and; HRS 1,387.
On Thursday, Managed funds were net buyers of 10,000 contracts of SRW Wheat; bought 10,000 Corn; bought 20,000 Soybeans; net bought 4,000 lots of Soymeal, and; bought 6,000 Soyoil. We estimate Managed Money net long 17,000 contracts of SRW Wheat; short 56,000 Corn; net long 142,000 Soybeans; net long 10,000 lots of Soymeal, and; long 69,000 Soyoil.
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