- HEADLINES: Chicago mixed at midday; NOPA crush disappoints; Better rain due in Dakotas next week.
- Chicago futures are mixed at midday in modest volume. Neither the bulls or the bears have been able to build any momentum with values chopping back and forth. Paris wheat futures have declined from last week’s high to a lower closer. Algeria’s tender is likely to occur at a higher price than their purchase 2 weeks ago amid the tightness of quality French wheat supplies. The Pro Farmer Tour is uncovering strong yield potential in Ohio and portions of S Dakota. Amid lacklustre demand, the results of the Tour could cause Chicago selling into the coming weekend with rain in the forecast for the N Plains and W Midwest. A choppy/mixed trade is forecast with China underpinning the soy market on breaks due to pricing. China is short bought and has a considerable tonnage of US soybeans yet to price. Most of the US demand will be coming off the PNW due to soaring world freight rates. We forecast a mixed Chicago close ahead of the NASS weekly Crop Condition and Progress Report.
- Chicago brokers estimate that funds have bought 2,300 contracts of soybeans and 1,900 contracts of wheat, while selling 3,600 contracts of soybeans. In soy products, funds have sold a net 1,900 soyoil while buying 2,300 soymeal. The corn market has a heavy feel amid the new fund selling.
- USDA weekly export inspections were 29.7 million bu of corn, 16.2 million bu of wheat, and 10.2 million bu of soybeans. The soybean exports were larger than expected while corn and wheat were slightly less.
- For their respective crop years to date, the US has shipped out 2,533 million bu of corn (up 936 million), 2,155 million bu of soybeans (up 614 million), and 179.5 million bu of wheat (down 29 million). China was the big exporter of US soybeans taking 5.3 million bu. We reported last week that China was loading 2 boats and is expected to continue loading out US soybeans into September.
- The July NOPA soybean crush rate fell behind expectations at 155.1 million bu. This was down 17 million bu from last year. This was the second smallest US soybean crush rate since September 2019 and reflects that USDA’s 2020/21 soybean end stock total may still be 5-10 million bu too low. The trade was looking for the July soybean crush rate at 159 million bu with soyoil stocks at 1,500 million bu. The smaller crush rate yielded a soyoil stocks total that was well above expectations at 1,617 million pounds. This total reflected smaller than expected domestic demand and that price was rationing supplies. The NOPA Crush Report was deemed as bearish with high US soybean/soyoil prices producing rationing.
- The Canadian harvest accelerated across the Northern Prairies with disappointing results. Yields for wheat/canola were often in the single digits in terms of bushels/acre, which has private analysts further cutting their wheat/canola/oat crop estimates. Extreme heat is being blamed as the cause.
- The midday GFS weather forecast is wetter in the Central Plains and Iowa this weekend but is drier across the Great Lakes region. Overall, the GFS’s big-picture theme is consistent with prior output and the N American climate trends cooler and wetter beyond the coming weekend. The mean position of the jet stream beginning next week will allow for better rain chances across the drier regions of Canada and the Northern US. 10-day precipitation accumulation is pegged at 1.0-2.5″ across the Dakotas and MN. Totals upward of 0.50-1.50″ impact the mid-South and Southern Midwest amid the lingering remnants of Tropical Storm Fred. Highs across the Plains cool into the 80s in the 6–15-day period.
- The US yield debate has not been put to rest, and next week’s exact precipitation totals and coverage are important to soybean crop health. The ingredients for a demand-led bull are firmly in place as international market rise, but sizeable new buying only occurs when this demand can be seen and felt on a weekly basis. The long-term outlook is bullish, but recent corn /soy price ranges hold into harvest.