Written Commentary
Grains are mixed. SU is unch and near 8.99. CU is up 1 cent and near 3.27. WU is down 6 cents and near 5.33. US Dollar is lower and lowest since September, 2011. Gold is higher. Investors continue to buy gold on fears of slowing global economic recovery.
Chinese Ag futures (Sep) settled up 8 yuan, up 60 in Corn, up 47 in Soymeal, down 44 in Soyoil, and up 16 in Palm Oil. Malaysian palm oil prices were at 2,737 (basis October) at midsession setting to snap a 3 day rally as discount to soyoil narrows.
The US Midwest forecast sees a cold front working through the SE 2/3rd of the Midwest in the next 36-48 hours and will bring moderate rain amounts with good coverage. The 6-10 day forecast for this time frame for the Midwest sees fairly limited rains for most of the region any rainfall is seen for northern sections of the Midwest and the Ohio River Valley. Temps are seen running near average. The 11-16 day outlook for the Midwest calls for average to a bit below average rainfall for the Midwest, with temps to run average early and a bit below late.
Corn futures traded lower last week on improved US weather outlook. Most look for weekly corn ratings to increase 1 pct from last week. Guesses for US 2020 corn yield are near 180.0 versus USDA 178.5. Range of guesses for US 20/21 corm carryout is 2,580 to 3,400. Some feel USDA may be too high in their estimate of ethanol and export demand. Some estimate CZ range from 3.20-3.50.Last week China sold 4 mmt of corn from their reserve. This brings total to 30 mmt. Talk of rapeseed, wheat and rice reserve sales for feed raises question about their corn demand and potential import needs.
Nearby soybean futures tested 9.00 last week on improved China buying. Most look for weekly soybean crop ratings to increase 1 pct from last week. Guesses for US 2020 soybean yield are near 50.5 versus USDA 49.8. Range of guesses for US 20/21 soybean carryout is 375 to 565. Bears feel USDA may be too high in their export demand. Key is actual China buying pace. Some estimate SX range from 8.40-9.40, SMZ 290-312 and BOZ 27.50-31.00.
Last week, wheat futures managed small gains on concern over EU/Russia crop sizes and small pickup in export interest. September Chicago wheat has been range bound since March between 5.00 and 5.40. Most look for that to continue. Some feel final US wheat carryout by class could increase for SRW and HRW but could drop for HRS. Trade is still concerned about reduced global food demand due to Covid.
On Friday, Managed funds were net buyers of 1,000 contracts of SRW Wheat; net sold 6,000 Corn; bought 2,000 Soybeans; net bought 2,000 lots of soymeal, and; bought 2,000 Soyoil. We estimate Managed Money net long 4,000 contracts of SRW Wheat; short 125,000 Corn; net long 88,000 Soybeans; net short 23,000 lots of Soymeal, and; long 36,000 Soyoil.
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