- Chicago futures are mixed at midday with wheat values trying to post a modest recovery as French wheat futures bounce and US September wheat bounce off $5.20 chart-based support. Chicago corn and soybeans remain under pressure on fund selling and looming large US harvests. The tone of the marketplace remains heavy with first notice day against September futures looming for late next week. Seasonal bottoms are expected either right before or after first notice day as discounted Argentine corn export offers become scarce. Few traders desire to have too large of a net long or short position until more is known about US corn and soybean yields. The Pro Farmer Tour is not shedding much information on whether the September yields will be above or below August. Crop condition changes are often a better gauge for yield changes in September than the PF Tour.
- Chicago brokers estimate that funds have sold 4,800 contracts of soybeans and 5,900 contracts of corn. In wheat, funds have sold 3,200 contracts early this morning with buying of 2,700 contracts causing the midday bounce. In soy products, funds have sold 3,200 contracts of soyoil and 4,100 contracts of soymeal. There are rumors of frost damage to Argentine wheat. It did get cold overnight in BA and southern sections of La Pampa with lows in the mid 30’s to the lower 40′s. However, producer sources argue that any cold damage was only cosmetic as it did not get cold enough to impact yield. Lows would have to reach into the mid to upper 20’s for yield damage and there is no evidence of such cold over the next two weeks. It is our belief that the Argentine cold weather rumors as unfounded. On Friday, the USDA is said to unveil the details on the $12 billion Trump Tariff Farm Assistance Plan. According to sources, the plan is supposed to offer $1.65/bu to soybean farmers and $.01/bu for corn. No payments are mentioned to US wheat farmers. The soybean payment rate could still change, but it is soy farmers that will see most of the financial support. This news will disappoint grain farmers. No payment amounts have been rumored for livestock or dairy producers as of midday. US soybeans will have to be harvested for the payment to be made, which means that US farmers could go after the 2018 soybean crop first. US farmers could delay corn harvest amid the unexpectedly low $.01/bu payment.
- US weekly ethanol production was 1,073 thousand barrels/day vs. 1,072 thousand last week that produced 315.4 million gallons of ethanol for the week. US ethanol stocks rose to 977 million gallons, which is up 8% from last year. The data was mixed for corn with ethanol stock rises offsetting increased production.
- The central US GFS weather forecast is wetter across the Lake States with a series of storms expected to impact MN/WI and MI. Rain will decline going southward with limited totals over the S Midwest, Delta and the S/C Plains. Above normal temperatures will persist with highs ranging from the 80’s to the lower 90’s. Any intense heat will be located over the C/S Midwest and the Plains. The forecast is too wet over the Lake States, but otherwise Central US crop maturity will be pushed by above normal temperatures.
- Chicago wheat is trying to bounce, but with Russia exporting record weekly totals, rallies will be tepid. And with rains slated to drop across E Australia in coming days, we doubt a new bull leg is unfolding just yet. Corn and soybeans are declining on fund selling amid pending large US harvests. Pro Farmer continues to find solid US yield potential.