Written Commentary
MORNING OUTLOOK
US Fed Chairman speech day. Grains are higher. SX is up 5 cents and near 14.36. SMZ is near 416.9. BOZ is near 65.39. CZ is up 4 cents and near 6.54. WZ is up 2 cents and near 7.91. KWZ is up 1 cent and near 8.67. MWZ is up 4 cents and near 8.99.
US stocks are lower. US Dollar is mixed. Crude is higher. Gold, silver, coffee, cocoa and sugar are lower. Cooper and cotton are higher.
Pro Farmer Midwest crop tour estimated IA corn yield at 184 vs 191 ly and soybean pod count down 4 pct from last year. They estimated MN corn yield at 190 vs 177 ly and pod count up 7 pct.
US Midwest should be mostly clear over the next few days. Much of the Midwest could see rains early next week. That should help soybeans. NOAA 8-14 day forecast is dry north with normal rains south. West EU remains dry. Russia is dry. Argentina is dry. China dry areas could see scattered rains. China drought is expected to impact rice more than corn.
Some feel 14.81 could be a top in the market into harvest. Cash remains strong on good crush demand and lack of farmer selling. Weekly US soybean export sales were confusing. USDA pulled the data and market awaits new sales data. China may have bought US soybean last week but not 75 cargoes. Brazil soybean export prices are firm on talk of new China interest. Matif rapeseed prices are lower on demand concerns. Canada canola is in a 800-900 range. Dalian soymeal, palmoil and soyoil prices were lower. US biodiesel and renewable fuel production is up. Mondays biofuel production capacity report could be key. SX has been in an uptrend since July 21 low near 12.88. Some feel SX could now be in a 13.75-14.75 range with harvest low near 13.00.
Corn futures dropped on Thursday due to lower Ukraine and Brazil prices. There is talk that Ukraine could increase corn exports and some feel as long as the corridor is open could export a total of 20-22 mmt vs USDA 12.5. Ukraine corridor expires in October and needs to be renewed to export 20-22 mmt. France corn crop rating dropped to 47 pct G/E vs 91 last year. Argentina remains dry. Argentina corn harvest is done with next season plantings start in a few weeks. Some feel 6.70 CU was too high going into harvest. Some feel key support could be closer to 6.00 CZ.
Wheat futures continue to remain range bound. Biggest bearish influence is lower Russian wheat export prices. US SRW fob prices ae near $338 vs Russia $300. Russia needs to be aggressive to sell a 94 mmt crop. Russia will need to increase export pace to reach USDA forecast of 42 mmt. Some feel nearby Chicago wheat futures may be in a 7.50-8.40 range. China drought may be impacting their rice crop. USDA est China rice crop at 149 mmt, demand at 156 mmt and end stocks 109. Some feel that drop in rice crop could increase wheat imports. Still USDA estimates China wheat crop at 138 mmt, imports 9.5 mmt, total demand 144 mmt and end stocks at 144 mmt.
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