Written Commentary
MORNING AG OUTLOOK
Grains are higher. SU is up 16 cents and near 14.16. SMU is near 417.8. BOU is near 64.05. CU is up 9 cents and near 5.16. WU is up 20 cents and near 6.81. KWU is up 12 cents and near 8.41. MWU is up 8 cents and near 8.92. Lower than expected China Q2 GDP offered resistance to energy, metal and soft markets.
Soybean futures are higher on talk of drier US west Midwest weather and active China buying on Brazil and US soybeans. Some look for USDA to raise US crop rating 1-2 pct from 51 G/E. This is still the 4th lowest on record. Dryness could be in Dakotas, MN, WI and IA. For the week, China bought 14-16 Brazil Aug-Oct Brazil cargoes, 10-12 Brazil Feb-May and 8-10 US PNW Oct-Nov. SU is near key 14.35 resistance. Some feel SX could test 14.50-14.75 if US LH July and early August rains are less than normal. Some doubt USDA US 52 bpa. Some are now using 51. Any increase is demand or yield drop could lower US 2023/23 carryout below 200.
Corn futures are higher. China bought 6-7 Brazil July-Sep corn cargoes. USDA still estimates China corn imports near 23 mmt. There is also talk they may have bought Ukraine corn. This week Brazil export corn prices rallied $1.25 due to slow farmers sales. China domestic corn prices have also rallied to $9.75. US domestic cash basis remains firm on slow farmer selling. CZ gapped open higher overnight. Some feel CZ could be in a 5.00-5.50 range until more is known about China corn demand. Some doubt USDA US 177.5 bpa. Some are now using 173.
Wheat prices are higher led by Chicago on short covering. There remains little evidence that Russia will extend the Ukraine export corridor deal. Wheat has also rallied on talk of lower Canada, US HRS, EU and Russia spring wheat yields. US winter wheat harvest is past 50 pct. Export demand remains slow. US all wheat carryout is estimated to drop for the 7th straight year. Trade will be watching for weather news from China, Canada, EU, and US HRS crop areas. Some could see Canada lose 3-5 mmt and lower Russia, EU and US HRS yields. WU traded over 6.80 resistance. KWU resistance is near 8.53. MWU resistance is near 9.10.
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