Ag Market View for Aug 19.22
Soybean futures ended slightly lower in a tight range near 14.00 SX. Soybean and soymeal futures saw some long liquidation in front of next week’s Pro Farmer crop tour. China hog producers have been active buyers of soymeal this week. Some fear drop in SOND soybean imports could drop supply of soymeal. Record heat and drought in Yangtze river is closing plants and could reduce food and energy demand. Strict covid policy and real estate crisis is slowing China economy which could also reduce food demand. C Midwest soybean basis continues to firm as crushers try to add to coverage before harvest. US fall 2022 soybean export commit is record high.
Corn futures ended higher in a relatively wide daily range. Demand concerns and
Long liquidation before next weeks Pro Farmer crop tour triggered early selling. Corn futures bounced off recent lows. Talk of increase Ukraine and Brazil exports has been limiting new buying. Favorable north and east Midwest corn crop also offers seasonal resistance. Support comes from talk of higher US domestic cash corn basis. Drop is SW feedgrain supply, talk of higher fall export demand and crushers trying to add coverage also offers corn support. Marketplace rumors this morning were talking about the hot, dry, weather in China impacting corn production areas in China. That is not completely true. Only some of the southernmost corn, soybean and groundnut areas have impacted by the warm and dry bias, but the moisture profile in those areas has never been as limited as it has been in rice production areas in the Yangtze River Basin. Most of the key grain and oilseed areas in China have not dealt with much heat and dryness this year. Western fringes of the Corn Belt are still dry biased and will likely not see much rain in the next week to ten days leaving those areas a little dry. However, without much excessive heat crops will likely get along a little better than one might imagine. Greater rain will be needed soon to protect late season crop development and the odds are relatively high that westernmost parts of the Corn Belt will continue to slowly dry down especially in NE, SW IA, KS and W MO.
Wheat futures ended higher trying to recover from recent losses.The forecast for Western Europe will bring showers to the west this weekend and then drier and warmer weather for a while next week before more rain in the following weekend. The bottom line on soil moisture, crop conditions and water supply should be mostly unchanged. Greater showers will impact parts of Eastern Europe to ease dryness in a part of the Balkan Countries. Russia’s drying continues to become more notable, but it is late enough in the season that the impact should be relatively low. The forecast does not bring greater rain to the region for another week and for some areas another ten days. Talk of record Russia wheat crop has helped drop WZ below 8.00. Russia and Ukraine are dropping export prices to compete for demand. Still some estimate that current Russia monthly export pace suggest annual exports closer to 30-32 mmt vs USDA 42. Russia farmers asking government to drop export tax as domestic wheat supplies are piling up.
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