- Chicago values are widely mixed at midday. The grains lower while soybeans hold amid ongoing interest from China. Corn bounced from the morning lows on larger than expected weekly export inspections. December soymeal has an open chart gap at $300/ton which is solid resistance before the complex turns back lower.
- Wheat futures gapped lower on sliding interior Russian/Ukraine prices and more aggressive farm selling. KC September wheat is expected to at least retest its low at $4.25/bu. We would note that last summer KC wheat did not forge its low until September at a price of $3.75. It may be premature to turn too bullish of wheat. It is a bear supply story in corn, whilst world wheat lacks export demand and recent Chinese purchases of US soybeans underpins the complex along with rising Malaysian palmoil futures.
- Chicago brokers estimate that funds have sold 8,400 contracts of wheat and 4,000 contracts of corn, while buying 2,500 contracts of soybeans. In the products, funds have bought 2,600 contracts of meal and 1,200 contracts of soyoil. The funds are extending their long soybean/short corn spread.
- US weekly export inspections were large for corn, but modest for soy/wheat. The US exported a stout 45.3 million bu of US corn, 18.4 million bu of wheat, and 16.6 million bu of soybeans. The corn exports were larger than expected and included 5.7 million bu loaded to China. The US also sent 2.7 million bu of soybeans to China.
- For their respective crop years to date, the US has exported 1,430 million bu of corn (down 286 million or 17%), 1,407 million bu of soybeans (down 36 million or 2.5%), and 131 million bu of wheat (up 6 million or 4.5%). There are just 6 weeks remaining in the old crop years for corn and soybeans.
- FAS reported 132,000 mt of US soybeans sold for the 2020/21 crop year to China. US exporters report that they see no sign of China’s interest in US soybeans this morning.
- There have been discussions on the impact of Central US heat on 2020 US corn yield. Most are nudging corn yields down on the warm temperatures. However, the warmth has not been lasting outside of the Central Plains (and at times in the Delta). The Midwest has endured several hot days, but the heat has not been extreme or lasting. This has allowed corn to respirate and move nutrients through the stalk. We would be careful about nudging US corn yield lower unless extreme heat develops/lasts during the fill stage. Thankfully, heat so far has not impacted pollination. The 50% pollination rate should be reached today with the kernel fill stage lasting into the middle of August. Any prior or coming heat will be less worrisome for US/Delta soybean yields in coming weeks.
- Needed rain is falling across S IA/ MO. The midday GFS weather forecast is cooler through the E Midwest/Delta and warmer in the Plains than the overnight run. Rains have been shifted southeast into the E Midwest and the Tennessee Valley from WI/MN/IA. The need for moisture is more acute across the E and S Midwest which will favour US crop yield potential. Any high pressure ridging is less amplified and further south which allows Midwest temperatures to retreat to the 80′s to the lower 90′s for highs next week. Seasonally cool temperatures will prevail this week through Friday with highs in the 70′s to mid 80′s. The extended 11-15 day forecast calls for a Central US high pressure ridge, but the forecast this far out cannot be trusted and stays erratic.
- Corn prices are back down testing last week’s low on the US and world oversupply. The rally in palmoil futures is sparking a soy rally, but it is doubtful that the tropical oil boom can persist. World wheat demand is struggling and the fall in futures reflects a Black Sea wheat crop that is similar to last year. Soybeans should be within a few cents of a top while the grains seasonally weaken into late August.