• HEADLINES: Wheat tries to regain Thursday’s losses; Spot cash corn/soybean bids hold at record highs; GFS forecast wetter for the lake states.

• Chicago grains higher at midday with wheat being the upside leader in lacklustre volume. Corn follows wheat while soybeans trims losses on strong old crop cash market. End users and exporters fight for remaining old crop supply amid a Delta harvest that will be delayed by the coming wet weather conditions. The hope for any early Delta harvest supply is fading amid cool/wet weather.

• Futures are mixed at midday as the market continues to chop in a broad trading range amid the coming harvest (bearish) and future improving demand (biofuel and export that is bullish). Fund managers are covering fresh shorts in wheat, but new export demand is lacking. The Black Sea cash wheat market is closed for the weekend, which has taken away some of the bearishness of declining fob price offers. Wheat fell to sharp losses on Thursday due to declining Ukraine fob offers with Russian offers in tow on harvest supply availability. China has not been an aggressive US soybean buyer in recent days which has helped pressure nearby futures values. Amid the 2022 record large US soybean crop, the onus of higher Chicago price has shifted to demand.   We look for a mixed Chicago close with FSA data and the Pro Farmer Crop Tour determining price trends next week.

• Chicago brokers estimate that funds have bought 3,200 contracts of corn and 5,700 contracts of wheat, while selling 3,900 contracts of soybeans. In soy products, funds have bought 5,300 contracts of soyoil while selling nearly 3,900 contracts of soymeal.

• Old crop cash basis is holding strong, and in some cases still rising, amid exceptionally tight supplies. Central IL soybeans are bid at $2.10 over November with spot corn bid at $0.60 over September. Such basis bids are record high for late August, which strongly suggests that US old crop stocks are less than WASDE is forecasting.

• The massive old crop premiums are pushing Gulf State or Delta farmers to start their new harvest. Unfortunately, the forecasts call for mild/wet weather which will prevent active harvest for another few weeks. If a farmer has any old crop stocks remaining, this is an opportunity to reward a market. Cash basis bids should peak in the next 10 days as the Delta harvest will get underway at some point. The early Midwest corn harvest will start after September 10 according to measurements from recent crop tour data.

• Ukraine fob wheat/corn offers have fallen sharply as the market tries to encourage importers to take the risk of sending vessels into the Black Sea to load. Most offers are for loading in 2-3 weeks with offers at or below $270/fob. Russian 11.5% protein offers have followed to the downside. We note that freight rates have been falling for weeks with values nearing 6 month lows. The fob price decline is the sale of 8 cargoes this week.

• The midday GFS weather forecast is wetter for the Lake States this weekend with totals of0 .5-1.50”. The rains will be timely for C IL/IN and OH. And a pattern of inundating rainfall will be in place through the weekend from the Southern Plains into the Southeast US with cumulative totals estimated at 1-3”. Showers elsewhere will be regional in nature. Temperatures warm to normal/above normal levels by early next week, with highs in the upper 80s/90s resuming across KS, NE, SD, and W IA. The forecast isn’t overly threatening amid the lack of lasting heat. The market will closely watch rain totals for C IL.

• It is a struggle between tight old crop stocks and coming new crop, the weakness in the Black Sea on wheat and the fast wheat export pace of the EU. And the US/world Central Bank raising rates to slowing economic growth. It is premature to chase Chicago rallies or breaks due the lack of any meaningful trend. As a result, we expect that Chicago volume will be subdued into the end of summer. The FSA will release its certified acre data on Monday. We hold to a bullish bias longer term, but there will likely be better buying opportunities as the US harvest starts.

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