• Soybeans sag on lacklustre US export demand; Paris wheat struggles with expirations/convergence; N Brazilian weather dry into October.

• Chicago futures are mixed at midday with soy futures lower while the grains hold onto an overnight rally. Cash hedge related pressure in soybeans along with speculative demand in corn has produced the mixed midday session. Talk that Brazil has sold China a few additional cargoes of October soybeans along with the expectation of hedge pressure at the close as caused values to pull back. December Chicago wheat nearly reached $6.00 resistance while December Paris wheat futures targeted €230.00. The market has a tired feel at midday with neither the bulls nor bears feeling inspired. Look for a mixed close with soy futures under pressure due to fund related selling in soyoil and buying in wheat/corn.

• The USDA reported that 100,000 mt of US soybeans was sold to China for the 2024/25 crop year. Amid this week’s purchases, China’s known purchases of US soybeans are over 5.0 million mt with unknown sales estimated at 4.0 million mt. So far, it appears that China has booked circa 9.0 million mt of soybeans out of an estimated total of 22-23 million for the 2024/25 crop year. Last year, China imported 24.3 million mt of US soybeans.

• Chicago brokers report that funds have bought 5,600 contracts of corn and 5,900 contracts of wheat, while selling a net 5,400 contracts of soybeans. In the soy products, funds have sold 3,900 contracts of soyoil and 2,100 soymeal.

• Paris wheat futures have had a big week of trade with the expiration of the September futures at €188/mt and the push by December near €230/mt. A large weekly reversal has been scored on the charts that has not gone unnoticed by hedge funds. Paris wheat is having trouble with expirations with big downward price falls followed by surges in the next futures contract. Some are questioning the integrity of Paris wheat futures with cash/futures being discounted at expiration and back months holding at sizeable premiums. Both May and September expirations have lacked convergence with the cash market. The only way that a regulator knows that a wheat futures contract has integrity with the cash market is to converge at expiration. Otherwise, the contract is disconnected from the cash market causing headaches for hedgers and end users. Part of the problem with Paris wheat is delivery is at Rouen France with storage rates beyond the first 10 days up to private negotiations. Accordingly, few are willing to take ownership of cash wheat at delivery. Rouen is an export port (like a hotel) which is unhelpful to convergence.

• Dry/warm weather is maintained across the Midwest next week with just a few showers over the N Plains next Friday. Otherwise, the hot/dry Midwest weather pattern is unrelenting. The Eastern Midwest will be the driest with some areas not having seen rain for a month. Crop maturity is being pushed with high temperatures ranging from the upper 70’s to the lower 90’s. Rains break out across the W Plains next weekend with a new tropical storm in the Atlantic to target the Eastern US states.

• The 10-day forecast offers no rain across Northern and Central Brazil. The drought will worsen with the monsoon showing no sign of activation. Showers will form across NE Argentina and far Southern Brazil into late September. Spring row crop planting is on hold as farmers await at least 2-4.00” of rainfall.

• Harvested yield reports will become numerous next week amid ongoing hot/dry Midwest weather that is pushing crop maturity. NOPA will be out on Monday, and we are looking for an August crush rate of 173 million bu and soyoil stocks of 1,290 million pounds. A sustained break in the soy complex will not occur until needed rain falls across N Brazil. Likewise, corn rallies are capped by new crop selling.

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