• HEADLINES: Soyoil soars on cash premium gains; GFS midday weather forecast cooler/drier in the 10–15-day update with heat next week.

• Chicago futures are mixed at midday with the soy complex higher, while corn/wheat futures sag on the Black Sea grain saga and profit taking into an uncertain weather and geopolitical weekend. The volume of Chicago morning trade has been well below normal with traders adjusting risk through options. Few are willing to add to their risk profile amid so many uncertainties. The recent back-and-forth in the marketplace has exhausted both the bulls and bears. And many fear that getting US corn/soybean yields correct will be a difficult task until the Midwest harvest begins. Rainfall has been extremely spotty in July with some areas seeing an abundance of rain while farms 50 miles away are suffering from acute drought. Yields are likely to be highly variable. We guestimate the US corn yield at 173 bushels/acre and soybeans at 51.0 bushels/acre as of today, with a downward bias based on the Central US weather forecast for the next 2 weeks. We look for a mixed Chicago close with short covering before the close based on the Black Sea political tensions/uncertainties.

• Chicago brokers report that the managed money has sold 6,800 contracts of Chicago wheat, 3,200 contracts of corn, and a net 900 contracts of soybeans. In the products, funds have sold a net 200 contracts of soymeal while buying 3,200 contracts of soyoil. Funds have been on both sides of soybeans/soymeal this morning.

• The UN following today’s “Post Black Sea Grain Food Summit” warned that many may die with 362 million people in 69 countries in dire need of humanitarian aid. The UN claimed that some will go hungry, and some will starve based on the decision not to keep the Ukraine Grain Export Corridor open. An economist told the 15 member that world grain prices will rise, but that just 3% of last year’s Ukraine grain exports went to the poorest countries in Africa/SE Asia.

• And Russia is proposing that it will send wheat/corn directly to Africa’s poor. Program details are awaited, but Moscow appears willing to help in feeding Africa to deflect US/world criticism over the ended corridor pact. Also, Russian sources are also suggesting that Moscow is considering ways to close Ukraine grain exports from the Danube River. The ending of Ukraine Grain trade appears to be a new military tactic of Russia, which means that attacks could continue against Ukraine grain export ports over the weekend.

• Argentina is expected to announce a corn/dollar program today or on the weekend to prod farmers to sell stored corn in a high inflation economic environment. Argentine farmers are being trained to wait for Government programs.  Argentine farmers are estimated to be holding around 22-23 million mt of corn and with 3.5-4.0 million mt needed for domestic feed production, at least 18 million mt of corn would be available for export. However, unless Argentine farmers have a need for Pesos to pay off crop input bills for October seedings, the farmer will likely stand firm on storing corn/soybeans with the monthly inflation rate running at 114%. To borrow money from an Ag Argentine Bank carries an interest rate of 105-120% making farming a “cash only” proposition.

• The midday GFS weather forecast is consistent with limited Midwest rainfall outside of widely scattered showers for IN/OH today. Heat builds early next week as the SW US high pressure ridge amplifies north and east with highs in the 90’s/lower 100’s. The mean position of the ridge retrogrades to the Intermountain West with Canadian air pushing southward across the Midwest in the 11–15-day period which pushes ridge riding rains to the Delta leaving the Midwest in an arid flow.

• Soyoil futures are rising on cash premiums and slowing US crush due to seasonal maintenance. The lack of any extended period of heat is pressuring corn/soy futures while Black Sea geopolitical hope has wheat under pressure. Don’t sell breaks! Volatile Chicago trade will persist!

To download our weekly update as a PDF file please click on the link below: