• HEADLINES: Chicago mixed but supported; FAS confirms Chinese demand for soy; GFS stays hot/dry.

• End user/importer interest in corn; Ukraine Ag Minister optimistic on future exports via Black Sea; soybeans await weekend rainfall in IA/MN.

• Chicago futures are mixed at midday in mediocre volume as few want to add to risk ahead of weekend weather, amid ongoing weather model disagreement, and as NASS’s first pass at by-state yield estimates loom large next Friday. It is clear end users/importers are rewarding the break in corn with new purchases, but it remains that a clear trend won’t be established until US crop sizes are better known. This process will begin next Friday. Yet, the market is beginning to pencil in severe yield loss across much of the Plains and mid-South, which on balance will weigh on national output even assuming normal E Midwest conditions.

• FAS reported the sale of 264,000 mt of new crop soybeans to China and unknown destinations, which helps rumours of China’s return on Thursday. China still has ample Sep-Jan supplies to price in the futures/cash markets, and while China may be unwilling to chase dramatic rallies the need for physical imports will provide a pillar of support moving forward.

• It has been confirmed that three additional vessels carrying a combined 58,000 mt of grain has left Ukrainian ports and are currently on route to Istanbul. Ukraine’s deputy Ag Minister this morning stated new crop wheat exports could begin via the Black Sea in September, but no details were offered. Thus far, it appears Ukrainian sea shipments will be piecemeal, and assuming handy-sized vessels are used, some 80 boats per month must enter and exit Ukrainian ports for shipments to reach 2 million mt on a monthly basis. We are hopeful that Ukrainian exports will increase, but logistical challenges look to prevent any explosion in grain flows there.

• IHS Markit, formerly Informa, joined in this week’s flood of US production estimates by pegging US corn yield at 176.9 bushels/acre. Production is estimated at 14,497 million bu, vs. USDA’s 14,505 million. Soy yield is projected at 51.8 bushels/acre, vs. USDA’s 50.5. The importance of rainfall across the Upper Midwest in the next 3-4 days cannot be overstated, and the market will wait with bated breath to see if radar maps show precipitation working across IA/MN on Sunday evening.

• The latest EU weather model, which only forecasts conditions 90 hours ahead, has trimmed projected rainfall in western IA, with Sun-Tues totals in excess of 1” to be only regional in nature across the far north of the state. Unfortunately, the major forecasting models look to enter the weekend in poor agreement on the 5-day outlook, which raises the odds of Chicago volatility Sun/Mon. Yet, reports of poor pollination across the Plains and mid-South are widespread and there is very little evidence to support corn/soy yield hikes next Friday.

• The midday GFS weather forecast is unwavering in its commitment to ongoing heat and dryness across the Plains and W Midwest. Spotty showers are forecast in northeast IA early next week, but the soaker needed to stabilise crop stress is unavailable. High pressure ridging will continue to meander aloft the Southern/Central Plains into Aug 20, which keeps meaningful precipitation confined to the Upper Great Lakes and far eastern/southern Midwest. Max temperatures in the 90s/low 100s are projected to be ongoing across TX, OK, KS, NE, SD and far western IA next week.

• The EU weather model since midday Thursday has trended drier across the W Midwest, and very close attention will be paid to this afternoon’s update.

• It is still a bit premature for bullish seasonal patterns to kick in, and fund investment in bulk awaits the release of NASS’s August crop report. But long-term fundamentals stay bullish, and it is critical that normal weather be established in S America this winter, particularly amid growing political instability there.

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