Written Commentary
Grains Outlook
Grains are mixed to higher. SX is up 2 cents and near 10.13. SMZ is near 326.3. BOZ is near 35.09. CZ is near 3.72. WZ is up 2 cents and near 5.45. KWZ is up 5 cents and near 4.80. China buying supports soybeans. Dry US August weather is helping corn. Very little sell pressure above the market also supports new tech buying. US stocks are lower. Crude is lower. Gold is lower. There is 35 business days until US elections.
Federal Reserve Chairman Jerome Powell’s comments Wednesday that the economic outlook is “highly uncertain” are weighing on stocks. Policy makers indicated concern that easy gains from reopening the economy could mask deeper scars among the most vulnerable businesses, with people likely to face longer spells of joblessness. The central bank also signaled that interest rates would stay near zero until 2023. China is only G20 country expected to see positive economic output this year, OECD says.
Chinese Ag futures (January) settled up 28 yuan in soybeans, up 23 in Corn, up 16 in Soymeal, up 150 in Soyoil, and up 102 in Palm Oil. Malaysian palm oil prices were up 80 ringgit at 2,989 (basis December) at midsession, an eight month high on increased demand from China ahead of a key festival week.
The 6 to 10 day forecast for the Midwest turned with some differences in the models. The GFS remains dry across the region, the European has light rains for the northeast sections of the Midwest, others remaining dry. Temps run below average but no cold air threats. The 11 to 16 day outlook for the Midwest has below average rainfall and average to above average temps.
Weekly US wheat export sales are estimated near 300-700 mt versus 484 last week, corn sales near 800-1,900 mt versus 1,823 last week and soybean sales near 1,599-2,800 mt versus 3,161 last week.
Farm Futures estimated US 2021 corn acres at 91.8 million versus 92.0 this year, soybean 87.7 verses 83.8, winter wheat up 2 pct at 31.3 and spring wheat down 4.8 pct at 11.6.
On Tuesday, Managed funds were net buyers of 3,000 contracts of SRW Wheat; bought 20,000 Corn; bought 20,000 Soybeans; bought 6,000 Soymeal, and; net bought 6,000 Soyoil. We estimate Managed Money net long 21,000 contracts of SRW Wheat; long 66,000 Corn; net long 213,000 Soybeans; net long 44,000 lots of Soymeal, and; long 97,000 Soyoil.
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