Written Commentary
Grains are higher. SU is up 4 cents and near 8.92. CU is up 3 cents and near 3.33. WU is unchanged and near 5.34. US stocks are higher. US Dollar is lower. Crude is lower. Gold is higher.
For the week, SRW Wheat prices are up roughly 1 cent; HRW down 6; HRS down 9; Corn is down 4 cents; Soybeans up 5; Soymeal down $6.00, and; Soyoil up 145 points. Crushing margins are down 2 at 85 cents; Oil share up 1% at 33%.
Chinese Ag futures (Sep) settled down 21 yuan, up 2 in Corn, up 15 in Soymeal, up 104 in Soyoil, and up 70 in Palm Oil. Malaysian palm oil prices were up 56 ringgit at 2,576 (basis October) at midsession looking at strong weekly gains and supported today by concerns over heavy rains in Malaysia, Indonesia, and China affecting supply.
Enough rain is expected in a majority of the Corn Belt the next two weeks for favorable crop development. Though, there will continue to be pockets that are drier than preferred with some crop stress. Last evening’s GFS model run added meaningful moisture into the eastern and northern Corn Belt July 26 – 28.
Last evening’s GFS model run was notably drier in many U.S. crop areas east of the Rocky Mountains July 29 – 31. The decreases were partially due to an overdone cool and dry air mass shown to shift down into the southeastern states and then stall.
For the week ended July 9th, U.S. All Wheat sales are running 6% ahead of a year ago, shipments unchanged with the USDA forecasting a 2% decline on the year. U.S. Corn sales are running 12% behind a year ago, shipments 19% behind with the USDA forecasting a 14% decline. U.S. Soybean sales are running 5% behind a year ago, shipments down 3% with the USDA forecasting a 6% decline on the year, Soymeal sales unchanged on the year, shipments up 3% with an unchanged forecast and soyoil sales 48% ahead of a year ago, shipments 44% ahead with a 47% increase forecasted.
Soybean futures are higher on hopes on increase China buying and higher Asian vegoil price action. Concern about palmoil supplies and positive China import margins continues to push vegoil prices higher. US Midwest 7 day weather outlook is favorable for US soybean crops. China US soybean buying pace is still below pace to reach USDA goal and Phase 1 deal.
Corn is supported by rumors of China buying. Still non China buying US corn is s till well below normal. There are rumors that China may be buying Brazil Aug-Sep corn. This raises some talk about China corn supplies. US 7 day Midwest forecast is favorable for US corn crop. Concern about US meat demand and still lower ethanol demand than before the virus offers resistance. US farmer remains a reluctant seller of new crop corn. This could be negative to prices when the do.
US SRW futures gave back most of Wednesdays gains on lack of confirmation of US sales to China. Russia wheat prices continues to firm on increase trade and hot/dry spring wheat conditions. Still, Russia export prices are below US. Wheat futures may struggle to move much higher. There remains increase concern about demand given resurgence of virus I US, Asia and South America.
On Thursday, Managed funds were net sellers of 12,000 contracts of SRW Wheat; net bought 15,000 Corn; bought 7,000 Soybeans; net bought 1,000 lots of soymeal, and; bought 5,000 Soyoil. We estimate Managed Money net short 3,000 contracts of SRW Wheat; short 175,000 Corn; net long 97,000 Soybeans; net short 28,000 lots of Soymeal, and; long 22,000 Soyoil.
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