- Chicago futures are higher at midday as funds continue with their buying ways as the market adds back weather premium into price. After weeks of weather premium extraction, the uncertainty surrounding wind damage to the IA crop and now dry weather is causing a supply discussion of “how big is the yield drop?”
- Chicago brokers report that funds have bought 16,400 contracts of corn, 9,500 contracts of soybeans and 4,200 contracts of Chicago wheat.
- FAS announced that 130,000 mt of US HRW wheat was sold to an unknown buyer. Everyone assumes that it is China, but Brazil is another name to comes up in US exporter circles. No US corn nor soybeans were announced in the daily reporting service. For US soybeans to China, it breaks a string of eight days of buying.
- Research forecasts a 2-4% decline in US corn good/excellent ratings and a 1-2% drop in soybeans this afternoon. Traders are far from certain on how to gauge corn wind losses in Iowa with greenness maps not offering much help. The Pro Farmer Crop Tour will best assess damage later this week with most commercial estimates ranging from 100-350 million bu. The losses will amount to 1-2 bushels/acre of US corn yield. NASS Crop condition reports this afternoon will help in that decision along with crop maturation, but this is not the finish to the 2020 US corn/soybean growing season that was hoped for. Funds are sizeable buyers with US farmers sellers of cash corn and modest amounts of cash beans on the rally. Few want to sell the rally until there is rain in the forecast and more is known about IA crop assessments from Pro Farmer.
- Weekly Export Inspections for the week ending August 13 were; 40.8 million bu of corn, 28.8 million bu of soybeans, and 16.9 million bu of wheat. All weekly export totals were in line with trade expectations. For their respective crop years to date, the US has sold 1,587 million bu of corn (down 230 million or 14.4%), 1,504 million bu of soybeans (down 94 million or 5.9%) and 207 million bu of wheat (up 5 million or 2%). The US wheat export pace looks to be following last year.
- A supply side Chicago rally is underway amid a dry 2 week forecast and uncertainty regarding 2020 IA corn production. Few IA farmers see any big concern with soybean losses as the plants withstood the winds much better than corn. The soybean problem is an immediate need for rainfall to support podding.
- The weather forecast is slightly wetter than the overnight run with better totals for IL/IN/OH and MN. IA/NE and KS remains parched while other areas see rain totals 0.5-1.25″. The GFS weather forecast has needed 1-2″ rains in the 11-15 day period but it is a long ways out for any confidence. Until then, this is a cool/drier than normal weather pattern that looks to take off the top end of US corn/soybean yield potential. However, cool temperatures will limit crop stress with highs in the 70′s and lower 80′s. Warmer readings return during the last week of August.
- Wheat futures are leading the Chicago rally on the hope of Chinese demand for US wheat (based on the sale to an unknown destination). Algeria will likely book Baltic wheat in its tender while Pakistan takes Russian wheat. Algeria would have to change their specs to allow an exporter to sell Black Sea wheat. Algerian quality specs won’t allow Black Sea wheat to work. Midwest corn/soybeans only need a few good finishing rains to preserve yield. The midday model offered better hope for IL and the E Midwest.