• Chicago ag markets are mixed at midday on Monday. Summer row crop and wheat futures have struggled to hold onto overnight gains, as US farm selling has increased on the rally while funds take profits on the push to new highs. Corn futures have slipped below unchanged through the morning trade, with only the soon expiring September contract holding positive. Soybeans have clung to gains but are well under the overnight highs and are trying to close the gap left at the Sunday night open. Wheat futures are also showing mostly green, but December is just a couple cents higher after scoring a 3-month high in the overnight market, on a larger Canadian harvest.

• The midday tone in Chicago is heavy. Funds who were large buyers overnight have turned sellers during the day. Chicago brokers estimate that since the start of the morning trade funds have sold 10-12,000 contracts of corn, 5-7,000 contacts of wheat, and have sold 7-10,000 contracts of soybeans. In the soy product markets, funds have been estimated sellers of 2,000 contracts of soybean meal and sellers of 3-5,000 contracts in soybean oil.

• We look for a mixed close. Crop condition ratings are expected to decline 2-3% in corn and 3-4% in soybeans, while the radar shows rains across E Nebraska and W Iowa.

• The USDA announced corn export sales to China, totaling 23.5 million bu. Last week’s export sales report showed new crop sales totaled 251 million bu. After today’s sale, the USDA has announced sales of 71 million bu to China/unknown in the last 3 days. Including announcements and outstanding old crop sales, new crop commitments to China are now above 300 million bu.

• Weekly Export Inspections for the week ending Aug 27 were: 15.8 million bu of corn, 29.6 million bu of soybeans, and 19 million bu of wheat. The soybean and wheat inspections totals were within expectations, while the corn figure was down more than 50% from last week and below the range of expectations. For their respective crop years to date, the US has exported 1,640 million bu of corn (down 217 million or 12% from last year), 1,585 million bu of soybeans (down 96 million or 6%), and 248 million bu of wheat (up 5 million or 2%).

• Russian farmers have been slow sellers of new crop winter wheat, knowing that they have the cheapest wheat in the world. Farmers are selling other commodities, in hopes that delaying wheat sales could result in better prices.

• At the same time, Stats Canada released their old crop stocks and initial new crop production estimates this morning. StatsCan estimated a total wheat crop of 35.7 million mt, up from 32.3 million last year on a big jump in Durum wheat. Canola production was pegged at 19.4 million mt, just under last year’s 19.5 million. Expectations had been for a 35 million mt wheat crop and a 20 million mt canola crop.

• The midday GFS weather update has maintained good rainfall accumulation of 1-2″ over the next 10 days for the driest parts of the Eastern Corn belt, adding some additional rain for the dry parts of NW IL. However, the model at midday has also turned drier in the outlook for much of Western Cornbelt, extracting much of the rain for most of the state of IA, MN, and WI. It is the IA crop that most needs the rain.

• Commercial sources have noted increased farmer selling over the last 3 weeks as prices have risen, with even better farm selling noted this morning. Funds on the other hand, are booking profits on the early week rally ahead of the 3-day weekend. The last 3 weeks have been a supply-driven rally as much of the Midwest has missed out on needed finishing rains. However, yields are far from a catastrophe and traders await NASS’s first field surveys due in the Sep Crop report next Friday.

• Soybean futures pushed to new rally highs on Friday amid a drier forecast for IA and the northern half of IL. Early this week, the forecasts had suggested 2-3″ of rain starting this weekend. Nearly all that rain has now been removed from the forecast.

• Soybean meal led Friday’s rally, with December pushing through the 200-day moving average and closing at a 5-month high.

• The CoT report showed that funds were buyers last week of 2,230 contracts of soybeans, taking their net long position to 109,288 or the most since March 2018. Funds covered their net short soybean meal position and were net long 2 weeks ago. Last week funds sold 7,419 contracts and were long just 3,560. In soybean oil, funds have been net-long since early July, and spot futures traded at the highest price since January. Funds bought 10,166 contacts last week and are now long 67,690 contracts, the most since February.

• Late season heat/dryness is driving Chicago soy prices higher. Crop condition ratings are expected to slide another 2-2% on Monday but will still be above the long-term average of 56%.

• Chicago corn futures ended slightly higher amid another tranche of export sales and as crop good/excellent ratings on Monday are expected to fall another 2-3%. US exporters sold 324,000 mt to unknown destinations, likely Japan or Mexico. The market continues to be dominated by supply and the risk of lower yields in NASS’s Sep report.

• In the last two weeks, managed funds have bought/covered an estimated 123,000 contracts. On Tuesday managed funds were short a net 61,000 contracts, vs. 110,000 the previous week. We estimate funds’ short today at just 49,000 contracts. This the smallest net short in late August since 2016.

• Amid this rare late Aug yield threat, the market has lost its natural seller in the producer. Yet, Dec corn is now just $0.10/bu below this day in 2019, and is overvalued amid projected end stocks of 2.5-2.7 billion bu. The big picture theme is of production expansion in S America and the Black Sea. Enough rain looks to fall in Argentina to allow planting to begin in the weeks ahead.

• US and world wheat futures ended weaker. Market-specific news is lacking. Stats Can and ABARES in Australia will release updated production estimates in the next 10 days. Both are expected to offer larger crop estimates. Stats Can’s release is due on Monday. ABARES’ release is due on September 5.

• Managed funds on Tuesday had established a net long position in Chicago worth 1,500 contracts. Fund length in Chicago today is estimated at 16,000 contracts, the highest since mid-April.

• Slow farmer selling in Europe and the Black Sea has kept cash fob prices there elevated. But eventually this supply will enter the global pipeline, likely when the Southern Hemisphere begins.

• Australia’s return to the world market is a big deal and will act to prevent a repeat of last year’s dramatic Nov-Feb rally in world cash trade. Like corn and beans, this rally is based on the loss of (European) supply. Supply-driven rallies will continue to be rewarded. Chicago July ’21 futures are overvalued above $5.60 in our opinion.

• Chicago ag markets are mixed at midday with old crop soybean futures higher while corn prices sag, with wheat futures caught in between. Funds are buyers across Chicago with their demand underpinning the summer row crops. The marketplace feels like a bullish tailwind exists, but that funds will have their corn short largely covered by $3.60, while November soybeans hold risk to $9.40- 9.50 as funds expand their upside risk profile. Chicago December wheat futures start having resistance above $4.40 as the spread to Black Sea fob values widen. US Gulf wheat is losing its export competitiveness on a further rally.

• We see Chicago closing mixed today with S American farmers hedging more aggressively on the rally. US farmers are selling old crop corn supplies but are not aggressively selling new crop amid yield weather/yield concerns.

• Chicago brokers estimate that funds have bought 4,600 contracts of corn, 4,100 contracts of soybeans, and 3,100 contacts of Chicago wheat. In the products, funds have bought 2,900 contracts of soyoil and 1,100 contracts of soymeal.

• Weekly US ethanol production was 274 million gallons vs 272 million last week. The production gain was modest and reflects that US ethanol production has stagnated since the end of June. Forecasts indicate that WASDE will cut its 2019/20 corn ethanol grind by 25-36 million bu. The 2 month US ethanol production pace is averaging 10-11% below last year which models out to a 2020/21 production estimate of 4,900 million bu in these Covid-19 times, which is down from the existing WASDE forecast of 5,200 million bu. It is hoped that by QI 2021 a Covid-19 vaccine can be found, and that normality in US economic activity will be found in the last half of the 2020/21 crop year. This why we carry a 2020/21 US corn ethanol grind estimate that is 150 million bu below the USDA at 5,050 million bu. We expect that WASDE will cut their 2020/21 US corn ethanol demand in several stages. WASDE’s 2020/21 domestic demand (feeding/ethanol) are too high by a combined 300-400 million bu.

• Fund demand is helping underpin Chicago, but traders are looking to use rallies to bank profits ahead of better Central US rain chances that start Thursday. US corn/soy conditions are likely to drop again on Monday, but any further fall in yield will depend on actual combine harvest data. The top end of 2020 US corn/soy yield has been cut, but the US will still harvest a sizeable crop with rain helping soybean yield potential more than corn into harvest.

• Chicago ag markets are soaring at midday with funds covering net short corn and wheat positions. Soybean futures are not reacting with as much upside vigour with last week’s high offering resistance at $9.195 basis November fuyures. Chicago has a firm tone at midday and a higher close is expected.

• A top in the corn market will likely be formed when funds have covered their net short position estimated at 88,000 contracts at the start of today’s trading. Funds are adding to an already large net long in soybeans. Traders assume that the high yield print from NASS was seen in August. The big question is how far will yields decline in the September WASDE report. IA’s straight-line winds and the dry finish to the growing season complicates the yield/harvest outlook. Early cutting across the Gulf States and NE/KS has produced better than expected corn yields. But this early corn was not impacted by the late season dryness. We look for corn/wheat volume to stay strong into the close.

• FAS/USDA reported sales of 408,000 mt of US corn to China and 100,000 mt to Japan. China also booked another 204,000 mt of soybeans with 145,000 mt to an unknown destination. The China corn purchase had been rumoured since late last week and was finally announced this morning.

• Chicago brokers estimate that funds have bought 30-32,000 contracts of corn, 9,600 contracts of soybeans, and 7,200 contacts of Chicago wheat. In the products, funds have bought 2,800 contracts of soyoil and 4,000 contracts of soymeal. US farmers are selling the rally with old crop corn sales. Already more than 220,000 contracts of December corn have changed hands.

• Hurricane Laura looks to take a slightly more westerly track and make landfall in Eastern Texas. Each model run has the storm being slightly further west than the prior run. Louisiana farmers reported that 68% of their corn was harvested through Sunday with reports that they will rush to cut the remaining crop before Laura makes landfall Thursday. The loss of downed LA corn will be modest, but heavy rain will slow soybean maturation.

• The lowest offer in the GASC wheat tender was $213/mt for 55,000 mt of Russian wheat. GASC secured wheat at $206.73/mt on August which makes today’s offer just over $6/mt higher. Traders are waiting to see how much tonnage is secured. Black Sea offers for September are holding at $203/mt.

• CONAB estimated that based on record high prices/profits, Brazil would produce a 2021 soybean crop of 133.5 million mt and corn crop of 112.9 million mt. The 2021 soybean harvest would be up a whopping 13 million mt with corn up 10 million from the current crop year. With normal weather, Brazil should harvest record large crops and add to the existing world grain/oilseed supply. Brazil looks to be seeding wall to wall with the Real at $5.60:1 US$.

• Traders are already discussing/factoring in a further decline in US crop condition ratings next week. Most are looking for another 2-3% fall in US corn good/excellent ratings on Monday due to this week’s heat/dryness.

• The midday GFS weather forecast is wetter across the W Midwest than what was offered overnight starting on the weekend. Hurricane Laura makes landfall slightly further west across far E TX with the system hooking E/NE into OH. A cold front is dragged southward that produces 0.5-2.00″ of rain across MN/IA/WI early next week. This rain is desperately needed. A cool with near to above normal rainfall pattern follows. There is no evidence of a frost into September 10. The coming rain and cooler temperatures will aid soybeans more than corn.

• Fund buying has been massive in corn with the next upside price target at $3.60 December. The bulls have a free “yield” pass to run values higher until the rain starts to fall later this week and weekend. Yet, it is still a big 2020 US corn and soybean crop, but the top end of yields has been taken off.

• Chicago ag markets are mixed at midday on Monday. Wheat futures traded lower following the forecast for rain across Argentina and reports that frost did not produce much damage to developing E Australian or S Brazilian wheat crops.

• The weakness in US wheat futures pulled corn off its high, but few traders want to be short fearing a sharp fall in weekly good/excellent condition ratings following the pure lack of rain since August 8.

• Late July and August was wet across most Midwest areas (excluding W IA), but the rains have since missed the Midwest causing acute net drying. 90% of the US corn crop should be in dough with 40% reaching dent which will help limit its yield loss, but the adverse yield impact on soybeans could be greater without rain late this week. The need for rain is immediate.

• We look for a mixed Chicago close with crop condition ratings expected to fall sharply. Then, it is the amount/location of rainfall which will then direct Chicago prices into the end of the week.

• The midday GFS forecast has the rains further south and west than was indicated in the overnight run leaving IA/WC IL with limited totals. This would be harmful to US corn/soybean yield potential into early September.

• Chicago brokers estimate that funds have sold 4,300 contracts of wheat, while being flat in soybeans (overnight buyers and morning sellers), while securing 7,400 contracts of corn. In the products, funds have bought 3,200 contracts of soyoil while selling 1,200 contracts of soymeal. Funds are exiting net corn short.

• US export inspections for the week ending August 20 were; 35.1 million bu of US corn, 42.2 million bu of soybeans, and 20.9 million bu of wheat. The soybean and wheat inspection totals were better than expected and considered supportive.

• Wheat weather forecasts have improved with some needed rain for Argentina this week while weekend cold weather threats for Brazil/E Australian produced limited damage on the weekend. The world has a supply abundance of wheat which has pressured the spot Chicago wheat/corn spread to a $1.87/bu wheat premium. The KC wheat/corn spread has narrowed to $1.02/bu which amid discounted cash basis, could cause Plains wheat feeding. Stats Canada will be out early next week with their August crop forecasts.

• It is being rumoured that China booked 4-6 cargoes of US soybeans this morning shortly after the Chicago opening for November shipment. No new sales of US corn, wheat or soybeans were announced this morning.

• The midday GFS forecast is wetter across the E Midwest but drier across the E Plains and W Midwest. The areas that really need the rain would have to wait until early September for moisture to fall.

• Note that soon to be Hurricane Laura looks to make landfall slightly farther east, but this all depends on the forward movement of the storm after it exits Cuba with warm Gulf waters to promote rapid intensification. If the storm is slower, it will be stronger and further west. The afternoon run of the EU model should help in the landfall determination. Until Thursday, mostly hot/ dry weather will prevail across the Midwest that is rushing crop maturity.

• Traders are looking for a 2-4% fall in US corn/soybean good/excellent ratings as crops just run out of soil moisture in IA, W IL and portions of OH. Talk that China booked another 4-6 cargoes of US soybeans this morning is helping underpin the complex, but a Chicago corn/soy break will not be sustained until some needed rain falls. This is not the finish that farmers desired as dry weather steals bushels and enhances S American soybean seeding that starts in mid-September. Rain is needed immediately.

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Weekend summary 21 August 2020

• Chicago ag markets are mostly lower at midday. A rising probability that wetter weather impacts the E Plains and Midwest in late August and weak outside markets are noted. Spot WTI crude is down $0.50/barrel at $42.40, with gasoline in tow. Spot RBOB gas futures still have been unable to exceed $1.30/gallon as weekly use remains plateaued at levels well below last year. Commodity indexes have had a solid bullish run since mid-May, but rallies moving forward will be more laboured as autumn approaches.

• The Brazilian Real at midday is down 1% and testing new 3-month lows. Political chaos in Brazil continues and it is unlikely that major government finance reform is passed in 2020. The Argentine Peso has made its habitual new all-time low. Currencies in Russia and Australia are also weak.

• Also recall that Brazil in late August will decide whether to extend its policy on allowing upward of 750 million litres of US ethanol free of tariffs. Sources suggest that there is a growing possibility that this policy is left to expire and will take full effect in November.

• The surge in Brazilian ethanol exports in recent months is another reminder of the rise in global competition for world market share of all products.

• China has also started to secure Brazilian soybeans for 2022, a long way out, but at attractive basis levels the Chinese see value in securing supply from Brazil way out in the future. Brazilian farmers can lock down handsome margins exceeding 50% over variable costs with the Brazilian Real trading at 5.65:1 US$ this morning. The profitable margins that Brazilian farmers are seeing will cause them to plant spring crops fencerow to fencerow starting on Sept 15.

• US export sales for the week ending August 13 were; 19.2 million bu of wheat, 30.9 million bu of corn (both crop years combined), and 94.0 million bu of soybeans. The soybean sales were right at trade expectations, while corn sales were less than expected.

• For their respective crop years to date, the US has sold 1,740 million bu of corn (down 231 million or 12%), 1,745 million bu of soybeans (down 41 million or 2.2%), and 408 million bu of wheat (up 25 million or 6%). China has bought a known 12 million mt of 2020/21 soybeans (1.5 million likely to be carried forward from new crop and 4.5 of unknown sales in 2020/21) likely to raise that total to 18.0 million mt. This is a record large purchase pace by China for US soybeans into January. We believe that China has the need for another 9-10 million mt to meet the WASDE forecast in the balance sheet.

• The midday GFS weather forecast is wetter in SD and IA late next week as the model brings back the chance of regionally heavy showers across the Western Corn Belt. The 11-15 day forecast is outright wet as a pattern of lingering moderate precipitation will impact a vast majority of the US Ag Belt. Totals of1.50-1.75″ Sep 1-5 will be favour MO, IL, IN and OH. It remains that the extended forecast needs to verify. The market will have a solid handle on the late Aug/early Sep by late in the coming weekend.

• Pro Farmer did not find a crop disaster and a big 2020 harvest still looms. On a national basis pod counts were higher than expected with rain in the forecast after another warm/dry 7 days. Once needed rain falls, the corn and soy harvest should pressure prices lower into late September or early October. Research looks for another 1-2% drop in corn and soybean crop ratings on Monday via this week’s total lack of rain. Condition ratings seasonally decline into mid-September.

• Chicago futures are mixed at midday in thin volume as traders await the yield results from IL/IA and try to gauge the extent of the current dry spell. The forecast has rain starting August 28 and nearly all the models are on board for a wetter pattern than recent weeks. Yet, the details of rain location/ amounts have yet to be worked out by each model. The rain must be pulled forward in the forecast for traders/producers to have any confidence and with 3 tropical systems in the Atlantic, uncertainty persists. The trade will continue to closely monitor weather forecasts and the results of the Pro Farmer Tour. The yield impact on soybeans will be greater than corn amid maturity.

• We look for a mixed close without much fanfare with the weather forecast for next week keying price direction into the weekend.

• Chicago brokers report that funds have sold 2,400 contracts of corn, while buying 600 contracts of soybeans and 2,700 contracts of Chicago wheat. In soy products, funds have bought 2,600 contracts of soymeal and 1,900 contracts of soyoil.

• FAS reported that 192,000 mt of US soybeans were sold to China in the 2020/21 crop year. We estimate that China has now taken 17.5-18.0 million mt of US soybeans.

• Contrary to cash rumours, FAS did not report that several cargoes of US hard wheat were sold to China. It is possible that the sales were done individually through differing exporters so that they will be covered in the weekly (not daily sales report), with the buyer said to be Hong Kong Mills. Wheat futures initially fell on the lack of confirmation but have bounced into midday. Black Sea wheat fob values are stable today at $202/mt.

• The 2020 Ukraine 2020 grain crop was estimated at 70 million mt according to the economy minister. This would be down 5 million from 2019 which likely includes a 35-37 million mt corn crop. This compares to a USDA corn crop estimate of 39 million mt. The Ukraine Government and market participants agreed to export 17.5 million mt of wheat in the 2020/21 crop year. The export estimate was in line with USDA and industry expectations.

• Rumours abound in Argentina that the Government is considering cutting export taxes for processed soybean products to make the country more competitive in world soy product trade. Rumours have the cuts at 3-5% compared to whole soybeans. The timing of any new tax changes is said to be in December/January.

• The August Cattle on Feed report is expected to show on feed supplies at 101% of last year, placements of 106% and marketings at 100%. The report will be released Friday and is expected to start a trend of rising US feeder cattle placements in coming months. Kansas wheat pasture is expected to be in high demand this winter as a cheap feed source.

• The midday GFS weather forecast is wetter in IA/IL late next week but is otherwise unchanged. Mostly dry/warming conditions are projected throughout the next 10 days, with a much wetter pattern likely thereafter. Soaking rainfall of 1-3″ is forecast across SD, NE and a bulk of the Midwest Aug 28-31. We have previously mentioned that this wetter shift is probable, but confidence in forecast details is low. Note that the GFS forecast brings a tropical storm into FL and the Southeast Aug 30-31. Exact Midwest precipitation totals in late Aug/early Sep hinge upon the placement of Gulf storm activity, which exacerbates forecast uncertainty.

• Rallies or breaks will not carry through until Pro Farmer offers you a final 2020 US corn yield for Iowa on Thursday. The Tour is in the western end of IA and eastern end of IL today. On Friday, Pro Farmer will release its Final Tour corn yield. US farmers are using this rally to part with additional old crop corn (on basis contracts vs September futures and cash corn in the bin). Few want to aggressively buy the market with the harvest weeks away. Yet, dry weather is limiting selling based on the worry over yield declines. The market is likely to keep rising until there a more definite chance of rain in the 7-day forecast.

• Chicago futures are mixed at midday with the grains weaker while soybean futures mixed with bear spreading noted. Chicago has a weak tone with easing world wheat fob values noted in the Black Sea which is pulling Chicago futures lower. The wheat market has been the market leader of the past several days. Chicago corn/soybeans continue to find support by drier than normal weather forecasts and the decline in Iowa crop conditions. Until it is clear that rain will be falling across the Midwest, the market will be unable to sustain any lasting weakness. Crops need a stabilising/finishing rain. We look for a lower Chicago close with wheat the downside leader. The drier GFS midday weather model will offer some late day support.

• Chicago brokers report that funds have sold 4,400 contracts of corn, 1,500 contracts of soybeans and 4,300 contracts of Chicago wheat. In soy products, funds have sold 2,200 contracts of soymeal and bought 3,100 contracts of soyoil.

• FAS reported that 325,000 mt of US corn was sold to China for 2020/21 delivery. This would take 2020/21 US corn sales to China to 6.0 million mt. Traders are understanding that a large 2020 US corn/soybean crop loom based on favourable weather conditions this spring and summer. A good soaking finishing rain is needed to assure 2020 above trend corn/soybean yields, but a crop disaster is not looming outside of the unfortunate wind torn areas of IA.

• Soil moisture anomaly data as of August 16 shows that acute dryness is centred on W IA and parts of OH. However, other Midwest crop areas can likely get by for now based on the coolish temperatures and existing soil moisture levels. Existing soil moisture and near to below normal temperatures will help preserve yield potential until late August rainfall arrives. The odds for rainfall in the next 5-7 days are poor.

• The well followed and respected Pro Farm Tour will survey IA on Wednesday and uncover highly variable and difficult crop assessment conditions. In fact, NASS will resurvey farmers to gauge how many will go ahead and harvest wind downed corn in their September report. We expect that some 300-600,000 acres of IA corn on the ground will be abandoned as straight-line winds reached in excess of 85 mph. The 10% drop in IA crop conditions accounts for the loss of 9-10 bushels/acre and 1.5 bushels/acre, nationally.

• The midday 10-day weather forecast is drier than the overnight run with rainfall of 0.1-0.5″ for the Midwest compared to the 0.4-1.50″ that was forecast overnight. We see the midday changes as being too dry as the models are struggling with the Gulf storminess. The extended range still has rains of 0.5-2.00″ in the 11-15 day period but confidence this far out is low. We maintain that a wetter profile is in the offing, it is just that amid a big increase in tropical storm activity, the models are going to struggle on the timing and exact rainfall details.

• Big US com/soybean harvests lie ahead in a world that is awash with wheat. Latest Russian wheat yield data projects a 2020 crop as large as 84 million mt. This big crop along with impressive yield trends in neighbouring regionswill cap Chicago rallies on limited US wheat export demand. Yet, a soaking Midwest rain is needed and the chance for such a rain are not indicated until late next week. We maintain a view of a secondary seasonal high forming this week with a decline into late September. Gulf state corn yields are running better than expected.

• 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.