Written Commentary
Grains Outlook
Grains are mixed. SU is down 1 cent and near 8.69. CU is up 2 cents and near 3.012. WU is up 2 cents and near 4.93. US stocks are higher. US Dollar is lower. Crude is higher. Gold is lower. Talk of US tax cut is helping US stocks and offering resistance to US Dollar and Gold. USDA report tomorrow.
Last evening’s US Midwest GFS model run was particularly aggressive about a surge of well below average temperatures to move across the Northern Plains and Corn Belt Sunday through Aug. 22. GFS model run was notably wetter in Iowa and the southwestern Corn Belt in general Aug. 20 – 25.
Corn futures continued to see short covering overnight. Some link this to positioning in front of USDA report. Cash is strong which has also triggered bull spreading. Yesterday’s strong winds may have damaged some Iowa corn fields. USDA dropped corn ratings to 71 pct good/ex. Most of the decline was in Iowa. 10 pct of the corn crop yield is below trend (OH), 29 pct trend (IA) and 53 pct above trend.
Soybeans may have found support from increase China buying US soybean. Trade will see if there are more announcements today. Some estimate that China has bought 12 mmt or 440 mil bu of US new crop soybeans to date. USDA is estimating a 400 mil bu increase in US 2020/21 exports. Some think USDA could increase US crop 120 mil bu tomorrow. This could suggest a US 2020/21 carryout near 550 mil bu despite China buying.
USDA increased US soybean crops rating to 74 pct good/ex. Only 2 pct of the crop yield is estimated below trend (MS), 20 pct trend (OH,AR,TN) and 73 pct above trend yield. Asian vegoil prices continue to trade lower.
USDA estimated that 90 pct of US winter wheat crop is now harvested. USDA dropped their rating of US spring wheat crop to 69 pct good/ex. USDA estimated that 15 pct of the US spring wheat crop was harvested. Talk of higher Russia. North Europe, Canada and Australia wheat crops offers resistance to prices. Egypt is tendering for more wheat.
Trade average guess for US 2020 corn crop is 15,170 mil bu with a range of 14,915-15.401. Trade average guess for US 2020 soybean crop is 4,258 mil bu with a range of 4,135-4,399. Trade average guess for US 2020 wheat crop is 1,833 mil bu with a range of 1,799-1,856.
Trade average guess for US 2020/21 corn carryout is 2,800 mil bu with a range of 2,622-3,061.Trade average guess for US 2020 soybean carryout is 525 mil bu with a range of 430-689. Trade average guess for US 2020 wheat carryout is 947 mil bu with a range of 899-1,011.
On Monday, Managed funds were net sellers of 4,000 contracts of SRW Wheat; net bought 9,000 Corn; bought 8,000 Soybeans; net bought 2,000 lots of Soymeal, and; net even in Soyoil. We estimate Managed Money net short 13,000 contracts of SRW Wheat; short 171,000 Corn; net long 39,000 Soybeans; net short 23,000 lots of Soymeal, and; long 46,000 Soyoil.
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