Written Commentary
SOYBEANS
Talk of China buying 3 cargoes of US Sep soybean has pushed SU over 14.50. There is talk that China may need to buy another 1.5 mmt for Sep. They are mostly covered for Oct but are uncovered for Nov forward. Some feel once they have Sep needs covered they may wait to see how South America 2023 crops are doing. Weekly US soybean export sales were a negative 400 thousand bushels. Total commit is near 2,182 mil bu vs 2.275 ly. USDA goal is 2,170 vs 2,261 ly. New crop sales were 15 mil bu. Unshipped open new crop sales are a record 561 mil bu. Next SU resistance is near 14.67. Another crop group est US soybean yield near USDA 51.5 and crop of 4,509 mil bu. Another group estimates US soybean yield near 50.5 or a crop of 4,417. They doubt USDA will say that August 12. 2 week US Midwest EU model suggest normal weather. GFS is drier especially IA and MN.
CORN
CU traded higher and followed higher soybean and soymeal. Some feel Brazil will soon be out of corn for export which could shift demand to US. Most still question actual Ukraine corn exports despite the headlines of the Ukraine export corridor being open. Weekly US old crop corn sales were only 2 mil bu. Total commit is near 2,201 mil bu vs 2,501 ly. USDA goal is 2,450 vs 2,753 ly. Brazil continues to sell corn to EU and China. Brazil is trying to define quality of Brazil corn so China can buy more. EU 2 week US Midwest weather is normal rains and temps. GFS is normal north and east but below rains and above temps in SW. Another crop group est US corn yield near USDA 174.3 and crop of 14,205 mil bu vs USDA 14,505. Some feel combined US/EU crop could be down almost 1.0 bil bu or 25 mmt from USDA July est. Matif corn closed up at the high end of a trading range. Continues to be concern that EU corn crops will continue to lose yield potential, with 50 Mmt not out of the question vs USDA 68. The Ukraine corn vessel is now through the Bosphorus and heading for Lebanon with no word on the condition of the cargo. But with 17 vessels loaded with Ag cargoes still in the three Ukraine ports that form part of the deal Turkish bulk carrier is heading to Chornomorsk to load grain?
WHEAT
Wheat futures were also higher and following corn and soymeal higher. WU had an inside day and is so far unable to trade over 7.89. Next resistance is near 8.03. Weekly US wheat export sales were 9 mil bu. Total commit is near 303 mil bu vs 309 ly. USDA goal 800 mil bu vs 804 ly. Some feel Wheat could be near key support and could see a rally due to talk of lower Russia and EU exports could be lower than USDA latest estimate . Matif wheat closed near the middle of a trading range, and at the same time French premiums were higher. The premiums reflect the lack of farmer selling and the scale of export (and domestic demand). Interestingly, the rise in EU what values comes at the same time as offers of Russian wheat are getting more aggressive. The problems for Russian wheat is inability to fix or hedge the export tax, but increasingly it’s the huge freight surcharges being asked by owners which are pushing Fob prices lower. Russia did sell wheat for Sep-Oct to Iran at $447. We are starting to get questions about Russia soil moisture and the risks for winter plantings. Ukraine winter plantings will also be a big risk.
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