- Soybean futures pushed to new weekly highs after the open but were back to unchanged by midday. Late day selling put the market on the lows leaving futures down 4-5 cents. The weekly US Export Sales report was disappointing. Weekly exports of 1.2 million mt (both crop years combined) were the largest since February. However, sales for the week amounted to just 25,936 mt of old crop and 792,575 mt of new crop. Outstanding salesof 4 million mt are unchanged from last year and similar to the past 3 years. It is the lack of new crop sales that is hanging over the market. Total new crop sales of 5 million mt are the lowest since 2005/06 (13 years). The trade anxiously awaits the national corn yield estimate from Pro Farmer. After which, the market attention will turn to the length of the 2019 growing season. We remain bearish on rallies back to $9.00 basis spot futures with soyoil to gain on soymeal into 2020 on strong palmoil prices.
- Dec Chicago corn ended unchanged amid limited fresh news. Pro Farmer’s official yield estimates will be released Friday. So far, route estimates suggest worst-case yield scenarios will be avoided barring an early frost, with solid yield potential intact across much of the Western Corn Belt. Export sales remain lacklustre and recall that 2018/19 exports were largely driven by shortages in S America. Without adverse S American weather this winter, competition for world trade continues into at least mid-2020.However, most important in the near term is the cooling of N American temperatures. 21 million corn acres across the Northern US had not reached dent as of last weekend. Cool temperatures over the next 10 days will keep corn’s push to maturity sluggish. The midday GFS features lows near freezing across parts of Saskatchewan in the 12-15 day period. A US frost won’t occur in the next two weeks, but the cool to cold trend is concerning. Breaks will struggle below $3.70 December, but rallies demand a Midwest frost/freeze threat.
- Chicago and KC wheat futures ended higher, with spot contracts leading the way ahead of the Sep delivery period. Research suggests that a lasting bottom is forming in Europe. Upside vigor through the autumn months will hinge upon Southern Hemisphere weather. As of now vegetation health maps show markedly better conditions in Eastern Australia and much of Argentina. Crop critical S Hemisphere weather lies just ahead. US wheat export sales through the week ending Aug 15 were a solid 22 million bu, vs. 17 million the prior week. Total 2019/20 export commitments sit at 383 million bu, up 69 million (22%) from mid-Aug a year ago. Traditional destinations have been active buyers of US HRW and HRS. We suspect this is due to spot prices being down $.90/bu from a year ago, basis Minneapolis, and $1.35/bu, basis KC. Yet, pace analysis suggests the USDA’s 975 million bu all wheat export forecast is accurate. A neutral outlook is advised. World cash markets are projected to creep slowly higher over time. US wheat is finding enough feed/export demand to support breaks below $4.60, basis Dec Chicago futures.