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Export Sales Day. Grains Lower.

Morning Grain Outlook

Grains are lower. SU is down 2 cents and near 8.73. CU is down 1 cent and near 3.10. WU is down 5 cents and near 5.05. US stocks are higher. US Dollar is lower. Crude is lower. Gold continues to trade higher.

Chinese Ag futures (January) settled down 19 yuan in soybeans, up 6 in Corn, down 27 in Soymeal, down 66 in Soyoil, and down 26 in Palm Oil. Malaysian palm oil prices were up 14 ringgit at 2,731 (basis October) at midsession on bargain-buying and ideas of a drop in July stocks and output.

Conditions are still expected to be mostly good for summer crops in the next two week, though, there will also still be areas of net drying. Concern remains of dryness in Iowa. Temps are seen running below average for the rest of week then warming to average to a bit above for the weekend and the first half of next week.

Last evening’s GFS model run showed a stronger, larger ridge of high pressure across the central and eastern U.S. Aug. 15 – 19 compared to the midday GFS model; and centered farther to the west. This would lead to greater rainfall in the Corn Belt for this timeframe however, net drying will still be possible in many areas of the region.

The 11 to 16 day forecast for the Midwest has the European showing a bit below average rainfall and above normal temps. The GFS has ridging meaning below average rainfall and above average temps

Weekly US old crop soybean export sales are est near 200-500 mt versus 257 last week, new crop 600-1.200 mt versus 3,344 last week. There was talk China bought 6 US/Brazil soybean cargoes yesterday. They may have bot a total of 28 cargoes this week. Needs to buy 6-7 cargoes each day to reach USDA import goal of 96 mmt. China/US relations were again strained overnight after US announced a Covid delegation will be sent to Taiwan. US/China trade talk will be August 15. China has bought 6 billion US Ag goods Jan-June versus 5 billion last year but well below the 10 billion bough the same time in 2014.

Weekly US old crop corn export sales are estimated near 100-600 mt versus -29 last week, new crop sales are estimated near 2,000-2,600 mil bu versus 638 last week. Talk of lower US 2019/20 and 2020/21 ethanol and export demand plus higher US 2020 crop will limit the upside in futures. Cash is strong due to slow US, Brazil and Argentina farmer selling.

Weekly US wheat export sales are estimated near 200-800 mt versus 676 last week. US export prices remain high and could limit export business. Talk of higher Russia crop and a 2020 Canada crop near a record 39 mmt could also limit US exports and upside in futures prices.

On Wednesday, Managed funds were net buyers of 2,000 contracts of SRW Wheat; net bought 7,000 Corn; sold 3,000 Soybeans; net sold 1,000 lots of Soymeal, and; bought 1,000 Soyoil. We estimate Managed Money net short 8,000 contracts of SRW Wheat; short 176,000 Corn; net long 55,000 Soybeans; net short 24,000 lots of Soymeal, and; long 54,000 Soyoil.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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