Written Commentary
Grains are mixed. SU is unchanged and near 8.87. CU is unchanged and near 3.20. WU is up 5 cents and near 5.24. US Dollar is lower. Crude is higher. Gold is higher. Most markets are on hold awaiting todays US Fed market comments.
Chinese soybean Ag futures (Sep) settled up 61 yuan, down 1 in Corn, down 47 in Soymeal, down 4 in Soyoil, and down 56 in Palm Oil. Malaysian palm oil prices were up 16 ringgit at 2,624 (basis October) at midsession recovering from two straight sessions of sharp losses.
The US 6 to 10 day forecast for the Midwest sees fairly limited rains for most of the region. Some rains are seen for most of Indiana and Ohio by early next week. Temps will below average over the next 10 days. Last evening’s GFS model run was wetter in Iowa Aug. 5 – 7; some of the increase in rainfall was likely needed due to the position of the ridge of high pressure. The 11 to 16 day forecast for the Midwest turned a bit mixed with the European model showing a bit below average rainfall with temps to run below average; the GFS model has close to average precip and temps.
There were rumors that US may soon increase sanctions against China. US could block China Banks access to SWIFT messaging and CIFS. This could block China Banks access to global payments to US. There is also talk that China may be trying to figure a way to buy lowest amount of US soybean until Brazil next harvest. China crush rate is near record and margins remain positive.
Brazil soymeal premiums firmed after word that Argentina had to Close one soybean crushing plant and close 2 port facilities due to the virus. Brazil soybean supplies are low due to record soybean exports. Both Brazil and Argentina farmers remain reluctant sellers of crop supplies.
Weekly US corn ethanol prediction should be near last weeks. Virus reduced US gasoline demand could add to ethanol stocks. Some look for US corn harvest to start 30 days earlies that last year.
Wheat futures continue to be push and pulled on talk of lower Europe and Russia supplies versus lower global export demand
On Tuesday, Managed funds were net sellers of 4,000 contracts of SRW Wheat; net sold 17,000 Corn; sold 10,000 Soybeans; net sold 3,000 lots of soymeal, and; sold 2,000 Soyoil. We estimate Managed Money net short 11,000 contracts of SRW Wheat; short 147,000 Corn; net long 80,000 Soybeans; net short 24,000 lots of Soymeal, and; long 32,000 Soyoil.
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