Written Commentary
Grain AM Outlook
Grains are higher. SX is up 1 cent and near 9.07. CU is up 2 cents and near 3.26. WZ is up 3 cents and near 5.31. KWZ is up 2 cents and near 4.55. Talk of China buying US soybeans (OND), wheat and corn is supporting prices. US stocks are lower. US Dollar is higher. Crude is lower. Gold is lower. Recent US Fed comments that Covid raises risk for US economic outlook offers a bearish tone to financials.
For the week, SRW Wheat prices are up roughly 22 cents; HRW up 20; HRS up 19; Corn is up 2 cents; Soybeans up 9; Soymeal up $4.00, and; Soyoil up 40 points. Crushing margins are up 3 cents at $1.02; Oil share unchanged at 34%.
Chinese Ag futures (January) settled up 5 yuan in soybeans, down 7 in Corn, down 28 in Soymeal, down 82 in Soyoil, and down 102 in Palm Oil. Malaysian palm oil prices were down 54 ringgit at 2,683 (basis November) at midsession on slower August export data.
The 6 to 10 day forecast for the Midwest between the models have some significant rainfall for some parts of the region while others see limited amounts. The GFS has rainfall mostly in the northern sections of the Midwest while the European model is more central. Temps look to move above average next week. The 11 to 16 day forecast for the Midwest has models in agreement of close to average rainfall and below average temps.
Pro Farmer tour participant estimated IA 2020 corn yield near 177.8 versus their estimate last year of 182.8 and USDA August guess of 202.0. Some feel final IA corn yield could be higher. Pro Farmer tour participant estimated MN 2020 corn yields from 195.1 versus their estimate last year of 170.3 and USDA August guess of 197.0.Both states had soybean pod count above last year and 3 year average. Pro Farmer will estimate a US corn yield today.
For the week ended August 13th, U.S. All Wheat sales are running 7% ahead of a year ago, shipments down 1% with the USDA forecasting a 1% increase on the year, U.S. Corn sales are running 12% behind a year ago, shipments 14% behind with the USDA forecasting a 13% decline, U.S. Soybean sales are running 2% behind a year ago, shipments down 5% with the USDA forecasting a 6% decline on the year, Soymeal sales up 1% on the year, shipments up 5% with a 2% increase forecast and Soyoil sales 44% ahead of a year ago, shipments 49% ahead with a 47% increase forecasted.
US old crop corn and soybean export commit appears below USDA goal. 2020 US Q4 corn and soybean sales are above last year and soybeans are record high. Commercial cash soybean ownership is good for now. Still below normal for corn especially new crop. Some feel US domestic soybean basis could see new pressure into the fall. Same group feels US domestic corn basis could firm before fall harvest.
China reported July feed use up 21.9 mmt or 7 pct from June. Hog feeding was up 37 pct yoy with sow feeding up 78 pct yoy. This is an impressive recovery. Current Brazil currency suggest higher 2021 soybean acres than last year. Ukraine is dry. Looks like Argentina could see needed rains next week. Quiet World wheat trade with Black Sea prices softer and looking for export demand. Asian vegoil prices continue to trend lower.
Managed funds were net buyers of 6,000 contracts of SRW Wheat; net even in Corn; sold 7,000 Soybeans; net sold 2,000 lots of Soymeal, and; sold 3,000 Soyoil. We estimate Managed Money net short 1,000 contracts of SRW Wheat; short 116,000 Corn; net long 54,000 Soybeans; net short 20,000 lots of Soymeal, and; long 60,000 Soyoil.
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