Written Commentary
Grains are mixed. SU is up 3 cents and near 8.93. CU is unchanged and near 3.16. WU is down 6 cents and near 5.24. US Dollar is higher, Crude is lower. Chinese Ag futures (January) settled down 2 yuan in soybeans, down 17 in Corn, up 13 in Soymeal, up 136 in Soyoil, and up 156 in Palm Oil. Malaysian palm oil prices were higher at 2,736 (basis October) at midsession in conjunction with rival oils and higher July exports.
For the week, SRW Wheat prices were down roughly 7 cents; HRW down 7; HRS down 1; Corn was down 8 cents; Soybeans down 7; Soymeal down $1.00, and; Soyoil up 40 points. Crushing margins were up 8 at 99 cents; Oil share up 1% at 34%.
This week, USDA should show an increase in US corn and soybean crop ratings. This would suggest a US corn yield above 180 and soybean above 50. This would add to US 2020/21 carryout. That would push futures lower. Trade will also be watching weekly US export pace and any new sales especially US soybean to China, US corn to China and any new US wheat export business.
The 6 to 10 day forecast for the US Midwest has light to moderate rainfall for most of the region by both the GFS and European models with mostly good coverage. Temps are below average this week warming up to a bit above average by the end of this week and the first half of next week. The 11 to 16 day forecast for the Midwest leans towards average to a bit below average rainfall and temps average to below.
USDA will issue its first official estimate of US 2020 corn and soybean crop. Thus is only a farmer survey report. USDA will not take field survey data although this year the crops are far enough along that field data may have been appropriate.
Most are looking for a 100-300 mil bu increase in the corn crop from USDA July number, Demand could be 100-300 mil bu lower due to drop in exports and ethanol use. Bears are estimating a US carryout near 3,400 versus USDA 2,648.
Most are looking for a 100 mil bu increase in the soybean crop from USDA July number, Demand could be 100-50 mil bu lower due to drop in exports. Bears are estimating a US carryout near 565 versus USDA 425.
Few expect USDA to make any big changes to US 2020/21 wheat carryout near 942 mil bu. USDA could drop Europe and Argentina wheat crop estimates but could also drop World trade an equal amount. There is still too much wheat in the World and demand continues to be lower due to the virus.
On Friday, Managed funds were net buyers of 2,000 contracts of SRW Wheat; net bought 1,000 Corn; bought 7,000 Soybeans; net sold 1,000 lots of soymeal, and; bought 6,000 Soyoil.. We estimate Managed Money net long 9,000 contracts of SRW Wheat; short 156,000 Corn; net long 67,000 Soybeans; net short 18,000 lots of Soymeal, and; long 49,000 Soyoil.
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