Grains Mixed on Favorable Weather
Grains are mixed in quiet trade. SN is unchanged and near 8.74. CN is up 1 cent and near 3.26. WN is up 1 cent and near 4.87. Seasonally, normal US summer weather suggest lower corn and soybean prices. US stocks are lower. US Dollar is higher. Crude is lower. Gold is higher.
US stocks are lower. Word that US might levy tariffs on $3.1 billion dollars of Europe goods is offering resistance. Surge in new virus cases in AR, CA and TX plus Germany also is weighing on equites. Governors of CA and TX are considering new restrictions on social distancing.
For the US Midwest, rains will finish up in the east today and then things will be mainly dry across the region through Thursday. The next round of rains will arrive in the west early Friday and work into the rest of the region later Friday into early Saturday. The 6 to 10 day forecast still sees moderate rainfall to continue into early next week with good coverage. Temps will be above average.
Wednesday starts the 2 days of US demand data. For corn, ethanol data should show increase in production but still are below levels before the virus. Stocks should drop and margins are improving. Processors bids are the best to farmers. US exports lag pace to meet USDA goal. Argentina is cheapest corn. Brazil crop size is growing and vessel line up is building. US 2 week weather is favorable for US 2020 corn crop.
Uncertainty over how much US soybeans China will buy limits soybean price action. Favorable US Midwest 2 week forecast and talk of higher US 2020 supply limits the upside in prices. Next week’s USDA report, month end and quarter end adds to futures volatility. Funds are small longs in soybeans waiting for new China buying. Funds are big soymeal shorts due to concern over demand.
Wheat prices are near season lows as north hemisphere harvest advances and offers pressure to futures. Europe and Black Sea old crop supply tightness offers support but building demand for Russia July exports in increasing which offers equal resistance to prices. Slow start to World wheat import demand weighs on prices. Increase in US and Europe virus cases also adds uncertainty to economies and food demand.
On Tuesday, Managed funds were net buyers of 1,000 contracts of SRW Wheat; net sold 15,000 Corn; sold 3,000 Soybeans; net sold 1,000 soymeal, and; sold 2,000 Soyoil. We estimate Managed Money net short 39,000 contracts of SRW Wheat; short 286,000 Corn; net long 29,000 Soybeans; net short 53,000 lots of Soymeal, and; short 4,000 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.