Written Commentary
SOYBEANS
Soybeans ended lower. Concern about China economy may have weighed on soybeans and soyoil. Most of the positive news yesterday has turn negative today. EU remains mostly dry and warm over the next 2 weeks. Today, London was record hot. The 7 days US weather maps Though added some showers for the east Midwest and cooler temps. 2nd week forecast is still mixed with most forecast bringing the ridge back into US west Midwest but normal in east. Most crop watchers are still using a US soybean yield of 51.5. Fact that 17 pct of China population is under lockdown, some China Banks are not allowing withdraws, China real estate market is in financial crisis and a record 19 pct of youth are unemployed is negative to commodities especially soybeans and soyoil.
CORN
Corn futures traded lower. Most of the positive news yesterday turned negative today. The 7 day US weather maps added some showers for the east Midwest and cooler temps. 2nd week forecast is still mixed with most forecast bringing the ridge back into US west Midwest but normal in east. Most crop watchers are still using a US corn yield at. 177.0. US corn crop was rated unch from last week and 64 pct G/E. Last year was 65. Best crops on IA, IL, ND, SD, and WI Lowest crops are OH, TN, and NE. 23 pct of crop yield is below trend, 24 pct trend and 44 pct above trend. More concern about EU corn crop and Ukraine exports. Argentina is dry with corn plantings starting mid-September. Matif corn traded lower, having failed to break the 1-month high. Multi National grain companies are now optimistic about increase Ukraine grain exports. Morgan Stanley economist feels US stocks are in a bear market but near a bottom, looks for US Dollar to test 120 (bearish commodities) and is bearish copper because of weak China economy.
WHEAT
Wheat futures ended lower. US winter wheat harvest is 70 pct while EU wheat harvest is 50 pct vs 3 average. Multi Nationals grain companies are now optimistic about increase Ukraine grain exports. Morgan Stanley economist looks for US Dollar to test 120 (bearish commodities) and is bearish Copper and grains because of weak China economy. Informa estimates lower wheat futures into the fall. This and other prices forecast of a lower trend assumes normal weather and less demand for US exports. This and latest USDA numbers limits new Managed fund buying especially given talk of global recession and normal World 2023 crops. The GASC tender saw no offers of Canadian or S American wheat. Most US offers were for 16-30 Sep (when premiums are still reasonable), but with Fob SRW at $50 over last night’s replacement, it was no surprise to many that GASC cancelled. The EU has decided to amend sanctions by unfreezing funds in 7 Russian banks (including VTB and VEB), provided they can prove the funds are being used for agricultural products. So some are asking if this the first stage of capitulation aimed at getting Russia to keep the gas turned on this winter?
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