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Mixed Grains AM Outlook

Grains are mixed. SU is up 4 cents and near 8.85. CU is Up 2 cents and near 3.29. WU is down 1 cent and near 5.49. US stocks are lower. Trade awaits more Bank earnings. US Dollar is higher. Crude is lower. Gold is lower.

Rumors of China buying 2 US SRW cargoes shot wheat futures higher on Wednesday. Would suggest US farmers clean up any old crop wheat inventory and sell another 20 pct of the 2020 crop.

Chinese Ag futures (Sep) settled down 2 yuan, up 17 in Corn, up 12 in Soymeal, up 38 in Soyoil, and up 62 in Palm Oil. Malaysian palm oil prices were up 34 ringgit at 2,563 (basis October) at midsession, near 5 month highs, on lower output concerns.

Last evening’s GFS model run was notably drier in the eastern half of the Corn Belt July 25 – 27. The decrease was due to this evening’s run being too aggressive with a large ridge of high pressure shown to spread over much of the region. Another notable change was the decrease of rainfall in the southern half of the Corn Belt July 28 – 30 and across the southeastern states as well. The 11 to 16 day forecast has models back in agreement with a well-defined ridge sitting over the Midwest bringing hot and dry weather.

Weekly US old crop corn export sales are est near 600-1,300 mt versus 599 last week. New crop sales are est near 900-1,600 mt. There are rumors China is asking prices for US JFM corn. China sold another 4 mmt corn from reserve. This is now near 30 mmt sold. Domestic prices remain historically high.

Weekly US old crop soybean sales are est near 300-950 mt versus 952 last week. New crop sales are est near 400-900 mt versus 382 last week. Increase China buying US is supportive but less than what is needed to reach USDA goal and Phase 1 deal.

Weekly US wheat export sales are est near 250-650 mt versus 326 last week. Rally in futures suggest US wheat export prices are highest in World. Russia wheat prices have firmed but are still below US.

On Wednesday, Managed funds were net buyers of 17,000 contracts of SRW Wheat; net even Corn; bought 7,000 Soybeans; net bought 1,000 lots of soymeal, and bought 3,000 Soyoil. We estimate Managed Money net long 9,000 contracts of SRW Wheat; short 190,000 Corn; net long 90,000 Soybeans; net short 29,000 lots of Soymeal, and; long 17,000 Soyoil.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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