Written Commentary
MORNING OUTLOOK
Grains are higher. SU is up 11 cents and near 14.35. SQ tested 16.00. SX is near 14.22 and up 134 cents from July 22 low. SMU is near 442.5. SMQ is near 496. BOU is near 61.31. CU is up 11 cents and near 6.11. CU is up 50 cents from July 22 low. WU is up 19 cents and near 8.09. KWU is up 18 cents and near 8.80. MWU is up 15 cents and near 9.25.
US stocks are lower. US Central Bank raised US interest rates 75 basis points as expected. Crude is higher. US Dollar is higher. Gold, silver, copper, coffee, cocoa, sugar and cotton are higher.
Soybean and corn opening interest continues to fall while wheat is trending higher.
US N plains and upper northwest Midwest are dry. Midwest forecast is warm and dry. EU is dry. Managed funds still unwilling to add to longs due to recession threat despite warmer and drier long range US Midwest forecast. US and China will talk today about US House speaker trip to Taiwan and if US will drop tariffs on a few China exports to US.
Soybean futures are higher. SQ is near 16.00. SMQ making new highs near 496. China domestic soymeal buying remains slow. Sep board crush margin tested 218. Cash is closer to 300. Soybean futures supported by strong US cash basis and a 30 day US weather forecast calling for warm and dry weather forecast. Dalian soybean, soymeal, palmoil and soyoil futures were higher. Matif rapeseed futures is higher and up 11 pct from Fridays low. Drier Canada and EU weather supportive.
Corn futures are higher. CU is over 6.00. 6.34 is now key resistance. Headlines still suggest Ukraine will increase corn exports to 7-8 mmt. There is data suggests so far in July, Ukraine has shipped 860 mt corn. Heat and dryness is expected across much of US Midwest rest of July and first week in August. EU corn crop will be smaller than USDA estimate. Some suggest USDA should drop EU corn crop from 68 mmt to 54. Lower crop could force EU to import corn. Dry US south plains weather could also lower US sorghum crop.
Wheat rallied on short covering and some concern of lower wheat exports from Russia and EU. There is data suggests so far in July, Ukraine has shipped 260 mt wheat. Some doubt the deal that will allow for large increase Ukraine export unless farmers overcome challenges to harvest crops, if agreement holds and impact warm and dry weather will have on crops. Russia said agreement could collapse if restrictions on Russia exports are not lifted. Second day of US ND annual crop tour estimated the region wheat yield near 47.7 vs 5 year average of 37.9. WU is near 8.09. Key resistance is near 8.22.
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