Written Commentary
Grains are quietly mixed. SU is down 3 cents and near 8.87. CU is up 1 cent and near 3.24. WU is down 1 cent and near 5.26. US stocks are lower. US Dollar is lower and near 23 month low. Crude is lower. Gold is higher.
Chinese Ag futures (Sep) settled up 6 yuan, up 7 in Corn, down 21 in Soymeal, up 74 in Soyoil, and up 88 in Palm Oil. Malaysian palm oil prices were up 60 ringgit at 2,701 (basis October) at midsession on lower output concerns, labor shortages.
The US Midwest 6 to 10 day has the GFS model showing rainfall in most of the Midwest with good coverage. The European model has lighter rainfall amounts favoring the southern sections of the Midwest. Temps are seen near average for the rest of the week turning a bit above average later but, no severe heat. The 11 to 16 day outlook for the Midwest has cooler temps and close to average rainfall across the Midwest through Aug 5th.
There was talk that China bot 2 Brazil soybean cargoes and 5 US yesterday. US Midwest could see warmer temps next week. This suggest regular rains will be need to keep crop conditions high. Brazil soybean export values have rallied sharply on lack of farmer selling and currency changes. . Soybean prices now up to US summer weather and China buying. US Sec of State called for a global coalition to counter a China threat.
Corn futures have given back all of the rally after USDA acreage report. Slow export demand and better crop conditions have increased fund selling and weighed on prices. Some now estimate US corn yield near 180. This and lower demand could add to US supplies.US Midwest will see warmer temps next week so regular rains are needed to insure high crop ratings. USDA August crop report no longer includes field surveys only farmer survey. Record 2020 corn yields are possible in western states. Hog futures could improve on better cash values. Cattle futures are near key resistance.
Wheat futures keep bouncing around. Talk of lower EU and Russia crops is supportive buy offset by slow export start. US HRW export values are competitive to German but still above Russia. Canada crop is improving. Russia spring wheat areas remain dry.
On Tuesday Managed funds were net buyers of 5,000 contracts of SRW Wheat; net sold 17,000 Corn; sold 6,000 Soybeans; net sold 2,000 lots of soymeal, and; bought 1,000 Soyoil. We estimate Managed Money net short 10,000 contracts of SRW Wheat; short 140,000 Corn; net long 85,000 Soybeans; net short 30,000 lots of Soymeal, and; long 25,000 Soyoil.
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