Written Commentary
SOYBEANS
Bulls had control of today’s grain markets. Word of China $200 billion dollar stimulus helped attract new buying. There is talk that China has bought US PNW corn, US PNW white wheat and US gulf sorghum offered support. No beans but talk of higher hog and crush margins could suggest new buying. The formula for a bottom in commodities is still a lower Dollar, higher sustained China demand and copper prices and Fed more dovish. Some feel that funds are not interested in buying grains until the shark (recession) is out of the water. Funds are also reluctant to buy soybeans before tomorrow’s US export sales fearing negative soybean sales. Trade est old crop sales near -300-+300 and new crop 100-300. Average guess for US 2021/22 soybean carryout is 210 vs USDA 205, 2022/23 207 vs USDA 280.
CORN
Word of China $200 billion dollar stimulus helped attract new buying. Fact Ukraine said they will not accept any Russia plan to reopen Ukraine exports also helped corn. Word that dry weather in west EU could lower their corn crop to 62 mmt versus USDA 68 mmt may be helping corn. There is talk that China has bought 300 mt US PNW corn and 2-3 cargoes of US gulf sorghum. The formula for a bottom in commodities is still a lower Dollar, higher sustained China demand and copper prices and Fed more dovish. Some feel next weeks US CPI data could begin to show lower inflation and by the fall inflation year on year increase could drop to 1 pct. Some feel that funds are not interested in buying grains until the shark (recession) is out of the water. Funds are also reluctant to buy corn before tomorrow’s US export sales fearing low corn sales. Trade est US old crop corn sales near 200-500 mt vs 88 last week and 0-300 mt new crop vs 119 last week. Weekly US ethanol production was down from last week and last year and stocks were up from last week and last year. Drop is corn prices helped margins but were offset by lower gas demand and energy prices. Average guess for US 2021/22 corn carryout is 1,489 mil bu vs USDA 1,485, 2022/23 1,437 vs USDA 1,400. USDA does not officially est US corn crop until September but trade still looks for a yield near 177 bpa and crop 14,523 mil bu vs USDA 14,460. Recent Midwest rains and forecast more over the next few days are helping crops were rains fell. 2 week forecast calls for above temps and below US Midwest rainfall.
WHEAT
Wheat futures traded higher and off recent lows and oversold tech picture. WU was up 32 cents and near 8.36. KWU was up 38 cents and near 8.89. MWU ended up 48 cents and near 9.34. Key resistance Is near 9.02 WU, 9.38 KWU and 9.95 MWU. Bulls have control of today’s financial, energy and grain markets. Fact Ukraine said they will not accept any Russia plan to reopen Ukraine exports also helped wheat. There is talk that China has bought US PNW white wheat. The formula for a bottom in commodities is still a lower Dollar and Fed more dovish. Some feel next week’s US CPI data could begin to show lower inflation and by the fall inflation year on years increase could drop to 1 pct. Some feel that funds are not interested in buying grains until the shark (recession) is out of the water. Funds are also reluctant to buy wheat before tomorrow’s US export sales fearing low wheat sales. Average guess for US 2022/23 Wheat carryout near 637 vs USDA 627. Average guess for World 2022/23 Wheat carryout is near 266 mmt vs USDA 267 but range of 240-272.
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