- World wheat prices are pacing the Chicago decline this morning with Black Sea values offered $3-4/mt below where they closed out last week. Russian 12.5% wheat is being offered at $186/mt down $3/mt which has pressured EU and US wheat values to start the week.
- Chicago corn/soybeans are following wheat lower with funds adding to their net short positions as December corn futures score a fresh contract low. The weakness in wheat is too much for corn to overlook and a bottom must be forged in this grain before corn will uncover any bullish heart.
- The midday GFS weather forecast has no indication of a Central US frost/ freeze into September16. Amid improved Midwest weather since mid-August, traders are betting that US corn/soybeans are adding to their yield potential. A further bump in US corn/soybean crop conditions is expected this afternoon.
- The tone in Chicago is heavy with the charts arguing for additional fund selling in the new month. The new contract lows in corn argues that should a recovery occur, December corn will struggle at the $3.88-3.9275 gap.
- Chicago brokers estimate that funds have sold 5,200 contracts of wheat and 12,6700 contracts of corn. Funds have also sold 3,200 contracts of soybeans along with 2,000 contracts of soyoil, while being flat in soymeal.
- US export inspections for the week ending August 29 were; 14.0 million bu of corn, 19.3 million bu of wheat and 47.0 million bu of soybeans. For their respective crop years to date, the US has shipped out 1,857 million bu of corn (down 416 million or 18%), 240.7 million of wheat (up 47.3 million or 24%), and 1,680 million bu of soybeans (down 388 million or 19%). The US weekly corn export pace of just 14 million bu was bearish as S America and the Ukraine continue to fill the world’s feedgrain needs.
- Brazil exported a record 7.6 million mt (298 million bu) of corn during August vs 2.825 million mt (110.7 million bu) last year. Including soybeans, Brazil exported 13 million mt of both grains or nearly 500 million bu which will put to rest concern over Brazilian export logistics/capacity. Brazil is on a pace to easily export record tonnages of corn. Brazil, Argentina and the Ukraine are likely to capture much of the world’s feedgrain demand into February of 2020.
- China’s Vice Premier Liu He stated that China is looking to resolve the trade differences on basis of equality and mutual respect, both sides must seek common ground and that China firmly opposes the trade war as it is not good for China, the US and the world. On the other side of the table, US President Trump stated that the US is doing very well in negotiations with China. Who is right? For both sides, there seems to be a divide related to trust.
- The midday GFS weather forecast has hurricane Dorian following the same path as the overnight runs and the consistency is increasing confidence in that Dorian will stay just offshore before making landfall along the SC/NC border, and then heading back out to sea. This will limit the storm surge, but strong winds will batter the Eastern US Coastline.
- Showers/storms are pulling through the Midwest with most rainfall accumulations to be less than 0.50″. The Delta and S Plains will stay dry for the next 10-12 days. There are hints of additional tropical storms in the extended range that take aim on the SE Coastline once again. There is no indication of a Central US frost/freeze into September 19.
- The new contract lows in corn is causing funds to add to their growing short position with the next downside target being $3.435 Sept, the lows in May. And Sept KC wheat reached the lowest level in 14 years (2005) at $3.66. This is no place to turn bearish with an important USDA crop report due out on Sept 12.