Written Commentary
MORNING OUTLOOK
Grains are mixed to higher. SX is up 3 cents and near 12.86. Soyoil is gaining on soymeal. CZ is down 1 cent and near 5.23. WZ is up 3 cents and near 7.08. KWZ is up 3 cents and near 7.09. MWZ is up 4 cents and near 9.08. US stocks are higher. US Dollar is lower. Crude is lower.
US stocks and grains are higher on less Evengrande concern and delay in US Fed tapering. There remains many questions on China food demand, hog herd and corn and soybean import needs. China announced controls over hog breading herd at 41 million 2021-2025. Contrary to food policy. Dalian futures saw soybean, corn, soymeal, palmoil and soyoil all higher. Covid demand? vs low supplies.
US weather dry. EU and Baltics dry. Ukraine, Brazil dry. Argentina drying. Russia getting rains.
Continued debate over US corn yield at 176.3 with ratings below ly 172.0. Soybean 50.6 vs 50.2. USDA Chief Economist optimistic about US domestic SBO biofuel demand and impact on soybean acres.
US Sep 1 Cattle on feed estimated near 98 pct. Sep 1 hog inventory also est near 98 pct. US weekly ethanol showed sharply higher margins, higher production vs ly,, stocks same as ly.
Weekly US corn export sales are est near 300-800 mt vs 246 lw. Commit near 24.5 mmt. USDA goal 62.8. Weekly US soybean export sales est near 500-1,000 mt vs 1,264 lw. Commit 22.3 mmt. USDA goal 56.9. Weekly US wheat export sales est near 250-600 mt vs 617 lw. Commit near 10.4 mmt. USDA goal 23.8. USDA est US Sep 1 corn stocks near 1,187, soybeans 175. Corn supply feels lower. Wheat guess 1,800.
US wheat prices not competitive for export demand. US prices need to compete for US 2022 acres. Russia talking about rationing wheat exports after Jan 1. Traders buying wheat selling corn spread. Russian farmer not selling wheat. Russia wheat export estimated below USDA 35 mmt.
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