• Wheat sags on weakness in European market; Row crops add premium on US weather forecast; US corn exports stay robust.

• Chicago ag markets are mixed at midday. Corn and soy are adding modest premium as a two-week period of dryness and expanding warmth are forecast across the Plains, Midwest, and Delta, while FAS in its daily reporting system featured welcomed confirmation of Chinese demand for US soybeans. Exporters this morning sold a total 442,000 mt of soy to China/unknown for new crop delivery. Importers in Asia and elsewhere are now seeing the US soy as the world’s low-cost supply for autumn/winter delivery and are reacting accordingly. No new corn sales were announced, but fob premiums in Ukraine and Brazil remain well above US Gulf origin into Nov/Dec.

• Wheat futures worldwide have shed premium as the Russian cash market remains stuck at $219-224 for Sep-Nov delivery. Egypt’s talk of including Turkish wheat as an acceptable origin underscores larger year on year stocks in the Mid-East. Turkey will struggle to export supply amid its relatively high prices, but larger crops as Mid-East tension have harmed regional demand growth.

• US corn export inspections in the week ending August 15 totalled 46 million bu, vs. 39 million the previous week and vs. 20 million in the same week a year ago.

• The US’s competitive position in the global marketplace continues to be reflected in strong counter-seasonal export disappearance, and without a collapse in weekly inspections in the second half of August work suggests the USDA will hike its 2023/24 US corn export forecast another 25 million bu to 2,275 million.

• A Canadian rail strike looks to be unavoidable later this week (Thursday) as each side remains far apart on negotiations with just days to go. Contacts suggest mandatory arbitration will be enforced if the strike lingers beyond a few days, but tensions are high. It is the disruption to the movement of consumer goods that is most concerning. Rail has an outsized influence on Canadian logistics.

• Autumn shows no signs of approaching in far E Europe, Ukraine, and Russia. There is still no meaningful rain forecast there into Aug 29, while temperatures exist some 5-10 degrees above average. The Black Sea’s Spring row crop harvest will move along smoothly, but an easing of drought is needed prior to winter wheat seeding.

• The midday Central US GFS weather forecast is consistent with morning output in keeping rainfall confined to Manitoba in Canada, while tropical activity stays largest east of the eastern seaboard into Aug 29. Midwest temperatures stay mild into Fri/Sat. An expansion of abnormal warmth occurs thereafter, with max temperatures to reach into the low 90s across NE, MO, southern IL, and southern IN by Sunday. Variable temperatures are forecast in the 8-14-day period.

• The structure of the market (sizeable fund short positions) and the end of bearish seasonal price trends in late Aug/Sep suggest risk assessment moving forward will be more two-sided. Key in the short run is whether Dec Chicago corn can settle above its 20-day moving average at $4.04 and whether Nov beans find buying/short covering interest above $9.80.

• Corn/soybeans form new contract low and bounce; World Ocean Freight Rates Bottoming?

• Chicago corn pushed to a new contract low while wheat/soybeans retreat near prior early week lows. It is surprising that corn is enduring this much selling pressure amid rising overseas cash markets. Chicago corn selling is tied to old crop producer cash sales and the prospect of record large US yield. We note that world corn exporter stocks/use is at or near a record low, which is contrary to rising US corn stocks. US corn stocks as a percentage of world exporter total is record large at nearly 90% which strongly suggests that US corn export demand will be strong through April of 2025. Corn will have a demand story emerging once the market is able to understand how big is big in terms of the US corn yield. NASS has already released a record US corn yield of 183 bushels/acre; will the Pro Farmer Tour find an even larger yield next week.

• Paris wheat futures are rising on short covering with prices higher as the harvest comes to an end. 2024/25 world wheat trade through August 15 is 19.5 million mt, equal to last year which was 19.45 million mt. 2024/25 wheat trade is occurring regardless of Turkey’s absence as an importer of 1-1.4 million mt/month. 2023/24 world corn trade is up 19 million mt at a record 154.5 million mt with soybean trade at 138.7 million mt, down 1 million. The point is soybean trade is starting to struggle, but world grain trade is holding strong on falling prices.

• World ocean freight rates are finding their “sea legs” after falling for most of the past quarter on declining demand for iron ore. The rise in capesize and bottoming in panamax ocean freight indexes indicate that end users are seeing value in dropping ore/grain/freight costs. A low in the ocean vessel charter market could be a sign of improving world trade or that China is starting to become active as a grain importer. A year ago, China was an active buyer/importer of Brazilian corn from August through year end. China has imported record tonnages of Brazilian soybeans in the past year but has been non-existent in the world grain market as a buyer of wheat/corn.

• Chicago brokers estimate that the managed money has sold 4,200 contracts of soybeans and 6,400 contracts of corn, while being flat in wheat. In the soy products, funds have bought 2,100 contracts of soyoil and sold 3,200 contracts of soymeal. Soybeans and corn both scored new contract lows this morning.

• The Central US midday GFS weather forecast run is consistent with the overnight solution which raises our confidence in its correctness. A broad drying trend is ahead for the Central US with any extreme heat confined to the Plains and the Delta. Central US rainfall chances are poor, and soil moisture looks to stay in sharp decline. A high-pressure ridge holds across the Central US with brief intrusions into the Midwest. The higher heights aloft limits Midwest rainfall and retards the monsoonal flow of moisture from Mexico. The heat/dryness pushes crop maturation, but following the rains this week, any acute moisture stress comes too late to dramatically impact yield. We anticipate a 1-2% decline in good/excellent corn/soy ratings on Monday.

• The Russian/Ukraine war has entered a deeper boil with Ukraine destroying a Russian bridge over the Seym River which is hindering civilian evacuations. The enhanced war effort by Ukraine has grain traders cautious about taking a big-short into the weekend. Midwest cash basis levels are stabilising following early week cash corn/soy sales. Chicago downside price risk is waning while traders assess the managed money short. The Pro Farmer Crop Tour starts Monday and field yield reports will be numerous. Dry S American weather is staring to be watched amid the driest subsoil in over a decade.

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Weekend Summary 16 August 2024

• Grains weaker at midday as Russian strike fails to disrupt Black Sea grain flows; Soy higher on positive demand news.

• Chicago ag markets are mixed at midday, with US wheat futures following Paris milling wheat contracts lower, soybeans hold onto Wednesday night’s rally amid improving export demand and larger than expected crush in July, and a meaningful contraction in soyoil stocks, and corn is caught in between. Spot Paris milling wheat has fallen to newer seasonal lows as concern over Russia’s strike on Odesa fades. Spot Russian wheat fob today is unchanged at $218/mt. We reiterate EU wheat futures perform poorly into September’s expiration, and newswires report Egypt has purchased no additional wheat via privately held talks this week.

• NOPA member soybean crush in July totalled 182.9 million bu, up 9.6 million year on year, above the trade’s guess of 182.4 and a record for the month. Sep-July NOPA crush of 2,018 million bu is up 5.1% on last year, which suggest USDA’s annual crush forecast may be too low by 10-20 million bu. However, the bigger surprise in NOPA’s July crush data is a drop in soyoil stocks to 1.50 billion lbs, down 27 million from last year and 100 million below the trade’s guess. Implied soyoil disappearance in July was an all-time record 2.31 billion lbs.

• Export sales data this x is mixed. US wheat demand is still middling, with sales in the week ending Aug 8 totalling 12.5 million bu, vs. 10.1 million the previous week. This matches exactly the pace needed to meet USDA’s forecast.

• Combined old and new crop corn sales were 36 million bu, vs. 29 million the previous week and vs. 37 million in the same week a year ago. Last year the acceleration in US corn export demand occurred beginning in early October, and it is important that sales increase at least modestly in the next 30 days. We would note that US corn is still cheap in the global marketplace, with spot Ukrainian offers on Thursday quoted an incredible $1.44/bu above Chicago futures (vs. Gulf basis of $0.80 over), but demand isn’t yet exciting enough to offset the market’s focus on US yield/supply.

• Old/new crop soybean sales were 58 million bu, vs. 48 million last week and vs. 50 million in mid-August 2023. Even larger sales are expected next week following recent daily announcements, but it is the goal of the market to encourage significant export demand expansion between now and January. Central Midwest yields will be at/slightly above USDA forecasts. Fortunately, world cash market price spreads favour US origin into mid-winter.

• Spot WTI crude at midday is up $1.40/barrel at $78.40. Resistance lies at $79-80. The Dow has extended its overnight rally to 460 points. The US dollar has recovered slightly after testing early August’s low on Thursday.

• The Central US midday GFS weather forecast is drier in the Great Lakes/Eastern Midwest in the 6-10-day period but is otherwise unchanged. Helpful rain is still scheduled to impact IL and the Upper Great Lakes over the next 24 hours, with additional totals of 1.00-1.25” offered to IL/WI. A drier trend is established elsewhere, and a lengthy period of dryness blankets all but the Upper Midwest Aug 17-30. The dominant feature of the US climate in the second half of August will be the expansion of high pressure aloft. Heat returns to the Plains and Delta/Southeast, while ridge-riding thunderstorms favour a path that includes northern SD, northern IA, MN, WI, and MI.

• Russia’s attack on Odesa is unlikely to impact near-term grain flows, and Pro Farmer’s tour next week keeps US yields as the market’s focus point. We would maintain that it is choppiness that defines price discovery in the short run. A demand-led recovery lies ahead in corn, while China still must price sizeable tonnages of US soy. US wheat’s inability to fully follow EU futures is noteworthy.

• Chicago bounces on US inflation data/weaker US Dollar; GFS weather forecast drier in E Midwest.

• Chicago ag markets are firm as the US dollar tests recent lows amid better than expected US inflation data for the month of July. CPI in July fell to 2.9%, vs. the trade’s guess of 3%, and which is below 3% for the first time since April 2021. Fed policy over the next several months will transition from managing inflation to encouraging full employment, which implies at least one rate cut between Sep and Dec. Yield on the 10-year treasury this morning has fallen to 3.8%, vs. 4.3% in late July. The Dow at midday is up 200 points.

• The question of ag market value will also be a focal point as the USDA’s Aug crop report has come and gone, and as seasonal trends in corn and wheat begin to point upward in late Aug/early Sep. As mentioned this morning, the soy balance sheet is heavy and stays that way until/unless S American crops are threatened. But cash crush margins are elevated, spot cash meal in IL is still quoted $45/ton above spot Chicago, and US corn is viewed as undervalued amid abnormal strength in international cash basis and as $4.00 cash corn triggers expansion in industrial consumption.

• US ethanol production in the week ending August 9 totalled 315 million gallons, vs. 316 million the prior week and up fractionally from the same week in 2023.

• Ethanol production in the last four weeks as reported by EIA is a record 1.28 billion gallons, up 2% year on year, and even assuming ethanol yield improvement we maintain USDA will hike 2023/24 industrial corn use by 10-15 million bu. That old crop corn export sales and ethanol production have responded to price so quickly is noteworthy. We doubt weekly grind falls all that much in Aug/Sep amid profitable margins and as unlike recent years there will be no issues with corn supply availability.

• Crude futures are down slightly on a surprise build in US stocks last week. Commercial crude stocks on Friday totalled 431 million barrels, up 1.4 million on the previous week but down 9 million from early August a year ago.

• Spot Russian fob wheat is stable at $218/mt following Tuesday’s $4/mt break. Spot Ukrainian fob corn is unchanged at $207/mt, vs. US Gulf quotes of $181-185 for Sep-Oct delivery. Paris milling wheat and corn have fallen to newer lows on strength in the €uro, which is testing mid-winter’s high of 1.10:1.

• The Central US midday GFS weather forecast is drier in IN, OH and KY as it concentrates rainfall over the next 48 hours across IA, IL, and the Upper Great Lakes. The model is consistent in projecting widespread dryness and expanding warmth in the 3-10-day period, with the Southern and Central Plains and Delta regions targeted with highs this weekend/next week in the 90s and low 100s. The principal Midwest avoids extreme heat, but normal summer-like temperatures are probable in IA, IL, and IN. A dry second half of August is likely.

• Wednesday’s recovery is so far a function of deeply oversold soybean futures and modest macro-based buying as currency relationships change. Substantial rallies will struggle until Pro Farmer’s tour is completed next week. We favour corn and wheat with pronounced recoveries in autumn/winter, while the soy market stays centred on Chinese demand. S American rainfall will be more closely monitored in September.

• Soybeans fall to sharp losses which drags down grains; Non-US corn export basis soars; GFS weather forecast warmer/drier at midday.

• Selling in the soy complex has pulled Chicago lower at midday. November soybeans have declined to $9.64 as the market absorbs the additionality of 1.0 million acres of US soybeans from yesterday’s August crop report. November soybean futures appear to be heading to $9.50, the old price highs looking backwards to the US/China trade war back in 2018-2019 when US soybean stocks swelled above 1,000 million bu. Corn and wheat futures are followers at midday of the acute weakness in the complex.

• Chicago is in a bearish trend on record large US corn/soybean yields and the loss of 900,000 acres each of corn/wheat is not enough to turn nearby price trends. However, US and Paris wheat futures are back against their old lows, but Russian fob spot price bids are steady at $222/mt with offers at $223/mt while Ukraine 11.5% wheat is $3/mt higher at $217/mt. Whether it be Ukraine wheat or corn, their values keep rising which has taken the pressure off of Russia to lower their offers to gain world demand. Our point is that world prices of wheat are not declining, it is Chicago/Paris futures markets that are being pressured by managed money selling in sympathy with record large US row crop harvests. The close today in US and Paris wheat futures is important if price does not close in the bottom quarter of the day’s range. Wheat followed by corn should be indicators of a trading low if values bounce near at the close.

• USDA/FAS announce the sale of 132,000 mt of soybeans to China and 137,000 mt of corn to Mexico. China is asking for additional US soybean offers at midday for October/November while Mexico is expected to buy similar amounts of US corn to this year’s record 850 million bu due to an ongoing drought across Northern Mexico. China has shipped out Brazilian corn, but totals are well behind last year. Brazilian corn basis is up 11 cents this morning at $1.15 over September while Ukraine corn offers are up 4 cents to $1.49 over. US Gulf corn at 84 cents over September is a bargain being $0.31/bu cheaper than Brazil and $0.65/bu cheaper than Ukraine. It is the sharp price rally in non-US corn origin offers that looks to underpin Chicago corn on weakness. Brazilian soybeans for September are offered at $1.48/bu over, up 8 cents on the day.

• Chicago brokers estimate that managed money has sold 5,900 contracts of corn, 6,100 contracts of soybeans and 3,100 contracts of Chicago wheat. In the products, funds have sold 3,600 contracts of soyoil and 3,100 contracts of soymeal. Managed money is adding to an already large net short Chicago position.

• The Central US midday GFS weather forecast is slightly drier and warmer than the overnight run. Hurricane Ernesto is further east with landfall across the Canadian Maritimes early next week as a category 2 or 3 hurricane. A high-pressure ridge bulges northward across the Central US which produces another round of extreme heat/dryness for the Plains and the SW Midwest. And the Delta/Plains stays generally dry. Thankfully, Central KS has received some needed rain in the past 24 hours. The various weather models are showing run to run variability and confidence beyond the next 7 days is low. However, if there is a theme, it is for a Central US ridge.

• Non-US corn basis offers keep soaring which places the US in an strong export position going forward. China remains active in booking US soybeans with yield determined by the next month of Central US weather. Look for the grains to bottom before soybeans amid improving demand.

• August USDA report supportive to grain, bearish of soybeans; USDA finds 1.0 million extra acres of beans and loses 900,0000 acres of corn.

• The USDA August crop report was slightly bullish of corn/wheat, but bearish of soybeans. NASS adjusted US 2024 corn acres downward by 800,000 acres to 90.7 million acres seeded with harvested acres falling 700,000 acres to 82.7 million acres. US wheat seeding and harvested acres declined 900,000 acres to 46.3 million and 37.9 million acres, respectively. FSA data was positive for the grains, but the finding of 1.0 million acres of additional soybean acres was bearish.

• The USDA forecast the 2024 US corn yield at a record 183.1 XBA, up 2.1 bushels/acre from trendline which combined with the fall in acres, raised the 2024 US corn crop size by 47 million bu to 15,147 million bu vs July. Note that old crop carry-in corn stocks dropped by 10 million bu due to a 25 million increase in exports and 15 million drop in food use. US 2023/24 corn ethanol use held steady at 5,450 million bu. US 2023/24 US corn exports were raised to 2,250 million bu on pace analysis.

• The average US corn farmgate price dropped $0.10/Bu to $4.20 in 2024/25. The new crop corn stocks/use ratio at 13.8% argues that spot corn futures are undervalued with spot futures to be closer to $4.00.  2024/25 world corn stocks fell 500,000 mt to 310.2 million mt due to a decline in Argentina/Ukraine crops.

• The USDA trimmed the Argentine corn crop to 50.0 million mt with Ukraine cut by 500,000 mt to 27.2 million mt. We expect further falls in Argentine and Ukraine crops as harvest data becomes available. The Brazilian 2024 corn harvest held steady at 124 million mt, while China’s corn imports were left alone at 23.0 million mt.

• The bearish surprise of the August USDA report was the finding of an additional 1.0 million acres of planted soybeans which along with a record yield, pushed US 2024/25 US soybean production upwards by 154 million bu to 4,589 million bu. Such a massive gain was not expected as it raised 2024/25 US soybean end stocks to a burdensome 560 million bu. USDA is forecasting a farmgate price of $10.80/bu which appears high with November soybean futures priced at $9.80.

• 2024/25 US soybean exports raised 25 million to 1,850 million bu. China needs to speed up its purchase pace if the US is to reach this total. The risks are real that 2024/25 US soybean end stocks could rise above 600 million bu and apply pressure to where November drops to a harvest low of $9.25-9.50. Rallies in November soybean futures will struggle above $10.25-10.50.

• The USDA raised 2023/24 China soybean imports to a record large 111.5 million mt and held 2024/25 at 109 million mt. Chinese demand will not be large enough to absorb all the supply and the message is that price falls to levels that curtails Brazilian seeding that starts on September 1. Soybean futures could fall below $9.00 next spring if Brazil produces a record large 169 million mt crop.

• Wheat data leans neutral to supportive in the long run. NASS hiked it US all-wheat yield to 52.2 bushels/acre vs. 51.8 in July, as higher projected winter yields more than offset lower durum/spring wheat yields. Winter wheat yield is raised 1.2 bushels/acre to 53.2; spring wheat yield was trimmed .5 bushels/acre to 52.6.

• Harvested wheat area was lowered 900,000 acres, and total US wheat production was cut a modest 26 million bu. This triggered a like amount drop in end stocks, which are now pegged at 828 million bu, vs. 856 million bu in July. Consumption was left untouched and based on worse than expected yields/quality in Europe, we view USDA’s 825 million bu US wheat export figure as 25-50 million bu too low.

• USDA’s adjustments to global wheat supply and demand did reflect enlarged production in Kazakhstan and Pakistan, where combined production will be up 7 million mt year on year. Ukrainian wheat output was lifted 2.1 million mt to 21.6 as final harvest data became available. Yet, EU production was lowered by 2 million mt. World wheat trade in 2024/25 was increased 2 million mt. World wheat feed consumption was increased 4 million mt. Exporter wheat stocks were lowered 1 million mt, with exporter stocks/used pegged at 13.2%, vs. 13.6% in July and vs. 14.2% in 2023/24.

• Corn’s value is being reflected amid soaring crude prices, profitable ethanol margins and as the US looks to dominate trade between Sep and winter 2025, and USDA is still 6-8 million mt too high with its combined Ukrainian/Argentine/Brazilian corn production estimates. It is the soy complex where bearish sentiment remains amid the need for reduced US area in 2025, assuming normal S American weather in Dec-Jan. However, with the release of USDA’s Aug report, most of the bearish input has been digested. The grains should be forming longer term annual lows.

• Chicago mixed on Monday yield fears; Wheat tests resistance at $5.50 and retreats: GFS midday weather forecast warmer/drier.

• Chicago grain markets are mixed at midday. Following overnight price trends, wheat futures have been the upside leader with corn and soybeans being sideways. The volume of trade has been limited by Monday’s USDA August crop report and the recent volatility of the financial markets.

• The trade is leaning heavily to the bearish side of the ledger in that Monday’s USDA crop report will show record large US corn/soy yields and limited change in seeded/harvested acres. Corn and soybean futures are dropping on this expectation with farmers also shedding old crop stocks.

• September Chicago wheat tested prior highs at $5.55 and pulled back. The Chicago wheat market is having a difficult time sustaining a rally until stronger world wheat demand can be confirmed and corn stops its bearish halt. The spot wheat/corn spread at $1.65 wheat premium is already extended, and for a larger US wheat rally, the corn market will have to find a bottom. This afternoon’s CoT report will reflect a further rise in net corn, soybean, and soy product positions. A mixed close is expected with September wheat to find support under $5.40, and December corn under $3.95. As risk vs reward is measured, it appears that Chicago is oversold and cheap relative to fundamentals.

• Chicago brokers report that managed money has sold 2,900 contracts of corn, 2,200 contracts of soybeans while buying 1,900 contracts of wheat. Funds are sellers of 2,200 contracts of soymeal and buyers of 1,300 contracts of soyoil.

• The USDA reported sale of 132,000 mt of US soybeans to China and 100,000 soymeal to Columbia with 212,000 mt of soybeans received for the delivery to unknown destinations. Of this total, 162,000 mt are for delivery in the 2024/25 crop year and 50,000 mt in 2023/24. We hear that China continues to secure US Gulf soybeans for October/November. Brazilian soybeans for September are offered at $1.36/bu over with Argentina at $1.04/bu over and the US Gulf at $0.82/bu over. US Gulf soybeans for September are $0.54/bu cheaper than Brazil and $0.22/bu cheaper than Argentina. The US is back to gathering world soybean demand to all destinations. Brazilian soybean offers beyond early October are difficult to find.

• There are cash connected rumours that NASS has completed a resurvey of US acres for Monday’s report. We believe that this rumour is false. NASS conducted no new surveys, but it will rely on Farm Service Program participation data for acreage changes. FSA data was collected online and is substantially available. There will be modest acreage adjustments in September, but NASS expects the big FSA planted/ harvested adjustments occur in August. The FSA August report will also update acres and the percentage of farmers participating in prevent plant and other programs. Historically, traders have struggled with FSA data and how it will impact NASS in September. That debate no longer applies with the NASS update.

• The Central US midday GFS weather forecast is generally drier than was shown overnight. The GFS model has been erratic and its solutions beyond the next 5 days are suspect. A drier trend is offered in the next 48 hours followed by ridge riding storms early next week. The midday GFS is also warmer than prior runs with high pressure ridging noted in the week 2 forecast. The rains occur mostly next week, and we fear that the rains will be further south and located in the Plains and SW Midwest. Our confidence in the GFS model stays low. We await the more consistent EU model amid the tropical storm activity across the Atlantic.

• The trade is heavily positioned for a bearish USDA report on Monday. Strong US crop ratings and favourable weather have traders discussing 182-184 bushels/acre corn and a 53 plus bushels/acre soy yield. However, the bearish sediment is becoming extreme. World grain crop production declining and Chinese soybean import demand is record large. USDA should raise Chinese soybean imports for 2023/23 by another 2-3 million mt by the final count to 110-111 million mt on vessel counts. Improving US grain export demand will wait until Monday’s report.

• Chicago mixed with summer row crop sag on yield fear; Wheat holds on rising EU/Black Sea offers; GFS midday weather forecast wetter for IL.

• Chicago ag markets are mixed at midday with corn/soybean futures lower while wheat tries to regain early day strength. The volume of trade has been moderate, and few are willing to enter new positions with the DOW up 500 points with the 10-year bond yield climbing back to 4% as US job unemployment claims fell to 233,000, which was less than expected and a positive sign for the US economy. The US dollar is modestly higher with high yield talk from the farmer keeping pressure on Chicago grain futures.

• There was a rumour this morning that NASS had completed a satellite study that showed US corn acres had fallen 70,000 acres and soybeans 46,000 acres due to late June flooding. The rumour is correct in that NASS did a flood study on a modest area surrounding the Missouri River. The study showed losses of 70,000 corn acres and 46,000 soybean acres with the results released back on July 9. The study should NOT be a reference on what NASS will offer on Monday when US planted/harvested acres are updated via FSA Farm Participation data is included.

• Chicago brokers report that managed money has sold 3,200 contracts of corn, 2,900 contracts of soybeans and 500 contracts of wheat. Funds are flat in soymeal while being sellers of a net 900 contracts of soyoil.

• US weekly export sales for the week ending August 1were 10.1 million bu of wheat, 19.1 million bu of old crop and 9.8 million bu of new crop corn (total 28.9 million bu), and 12.0 million bu of old and 36.2 million bu of new crop soybeans (total of 48.2 million bu total). For their respective crop years to date the US has sold 2,193 million bu of corn (up 606 million or 28%), 1,682 million bu of soybeans (down 268 million or 13%), and 316 million bu of US wheat (up 81 million or 34%). China secured 134,500 mt of US old crop and 400,000 mt for new crop soybeans last week. All origin US new crop soybean sales are 4.52 million mt.

• We hear that Chinese demand for US soybeans is occurring on a daily basis. Why these sales are not being reported by FAS is unknown, but speculation is growing that the purchases are made by COFCO and held on their domestic books (COFCO is a US Grain Merchant) and will not be announced until its shifted to COFCO China for export. WE also understand that as many as 10-14 cargoes of US soybeans have been sold to China this week. China appears to be going to some length to incorrectly report monthly soybean import volumes and become difficult to follow in individual country markets. China is booking US soybeans on breaks and will take at least 20-22 million mt of US soybeans in the 2024/25 crop year. We estimate that China will import 24.8 million mt of US soybeans in 2023/24. Through August 1, China has purchased on a known basis just 562,000 mt of US soy.

• The Central US midday GFS weather forecast is wetter across IL as a ridge riding storm takes aim on the state during July 13. The models poorly forecast ridge riding storms beyond the next 48 hours and our confidence in the wetter midday IL forecast is no better than the totally dry overnight solution. There will be changes in the IL forecast heading into next week.

• Mild to cool temperatures will blanket all but TX/OK this week. Highs across the principal Corn Belt will range from the 70’s to the mid-80s. Overnight lows are forecast to drop into the 40s/50’s. Heat resumes after Aug 14-15, but extreme readings are forecast to favour areas in the western third of the US. This is not a wet general Midwest forecast, but ridge riding storms will produce better rainfall across the Plains and the Western Midwest.

• Private discussions point to a US corn yield of 183 bushels/acre plus and a soybean yield of 53 bushels/acre plus for Monday. Few are willing to forecast planted and harvested acreage changes, but we see a loss of 1.0 million acres of corn and 600,000 acres of soybeans. Thus, a corn yield gain of 2.3 bushels/acre could be totally offset by a harvested acreage loss of 1.0 million. The shock would be if 2024/25 US corn stocks hold steady or decline. Soyoil has a developing story on US UCO supplies are being scrutinised by EPA, which trims imports.

• Chicago sags on cool US weather forecast; Energy/equity market continues recovery.

• Chicago ag markets are slightly weaker at midday as new investment flows back into equities and energies and as mild temperatures and rainfall in KS/NE this weekend keeps elevated yield ideas intact. Just how much record (by far) yields in the Central Midwest offset challenges in OH, the Southeast and parts of the W Plains is key and will be settled via NASS estimates on Monday. Yield estimates from the commercial trade ahead of USDA’s Aug report are centred at 182-183 bushels/acre for corn and 52.5 bushels/acre for soy. FAS’s daily reporting system was void of new export sales. Additionally, cash basis at major markets continues to slide as the last of old crop supplies is priced.

• Financial markets in the US and elsewhere continue to recovery from Monday’s lashing. Spot WTI crude is up $1.85 at $75.10 amid seasonally tightening US supply and demand. The US dollar index is up 0.2% at midday and sits near unchanged on the week.

• Funds this morning have been reluctant to chase Dec Chicago wheat higher following the contracts breaking through its 20-day moving average Tuesday. The Russian fob wheat market is again flat at $221-225/mt for delivery into December, and the global cash wheat market since mid-summer has been defined by a near complete lack of activity.

• Gulf SRW is relatively cheap in the global wheat market on a fob basis at $218/mt, but key is whether traditional importers opt to step up forward coverage at deflated prices. Jordan has re-tendered for optional origin wheat supplies this morning, which follows new tenders released from Egypt and Algeria Tuesday.

• US ethanol production in the week ending August 2 totalled 314 million gallons, down from the prior week’s all-time record 326 million gallons but up 4% year on year. Ethanol stocks were down 9 million gallons from the prior week at 998 million amid stable domestic/export disappearance. Final 2023/24 industrial corn disappearance is projected 10 million above USDA’s forecast in July. 20923/24 US corn exports too should be raised 25-40 million bu following June Census data, and so final US corn stocks are forecast to drop below 1,840 million bu.

• US commercial crude stocks last Friday totalled 429 million barrels, vs. 433 million the prior week and down 4% from early August 2023. Stocks of 429 million barrels reflects just three weeks of consumption, which in turn is at the lower end of recent years. Crude has value below $72.

• Ukrainian corn fob premiums are up another $0.06-0.07/bu at $1.10-1.35/bu over Chicago futures for Sep-Nov delivery. Reductions to Ukrainian corn production have paused at 23-24 million mt, vs. USDA’s 27.7 and 31 a year ago. Harvest data is awaited as crippling drought there gets extended into late Aug.

• The Central US midday GFS weather forecast is wetter in southern IL but unchanged from morning output elsewhere. Mild to cool temperatures will blanket all but TX/OK this week. Highs across the principal Corn Belt will range from the upper 60s to low 80s. Overnight lows are forecast to drop into the upper 40s across the Dakotas, MN, WI, and northern IA. Heat resumes after Aug 14-15, but extreme readings are projected to favour areas west and south of IA. Rainfall into Aug 13 favours KS. One system is forecast to impact eastern NE, IA, MO, and southern IL Aug 14-15.

• The spec community’s US yield forecasts are very likely much higher than the commercial trade’s. Balance sheet work suggests a US corn yield above 184 and soy yield above 53 are needed to guarantee burdensome domestic supplies. NASS’s August survey/satellite-based yields are awaited. An export demand story looms in corn.

• Wheat rallies on unusual GASC tender for 3.8 million mt; Corn steady on lack of news; China back securing US soybeans.

• Midday Chicago values are mixed with the grains (corn/wheat) higher while soybean values sink. Wheat has been the upside leader as Egypt’s GASC tendered for an unusually large 3.8 million mt of world wheat from October through April under 270-day credit terms. The news pushed September Chicago wheat above its 20-day moving average at $5.405 and triggered a round of short covering. The 200day moving average has performed well in trading the wheat market for the past 5 months as futures prices have existed in dynamic bull-and-bear price trends.

• Soybean futures have held in the red as crop condition ratings gained an unexpected 1% in the good/excellent category. We note that condition ratings tend to more correctly gauge US crop yields following the August NASS crop report. Until then, crop ratings tend to be more of a beauty contest rather than an indicator of yield.  Soy futures act heavily while the grain markets are finding support on breaks. However, please be aware that volume is well off from Monday, as portfolio managers are adjusting risk profiles lower.

• Chicago brokers estimate that managed money has purchased 3,100 contracts of wheat and 3,500 contracts of corn, while selling 4,400 contracts of soybeans, 3,400 contracts of soyoil and 300 contracts of soymeal. It has been a morning of buying grain and selling of the complex.

• Egypt’s GASC tendered for a large 3.8 million mt of world wheat from October through April with credit terms of 270 days and exporters having to offer 3 months of wheat in each tender timeslot. To the best of our knowledge, GASC has never tendered for a specific quantity of wheat for 9 months forward. GASC is tendering for enough world wheat to take them for the own domestic harvest. Whether this is because they fear an expanding Gaza war or the “price is right” is unknown. However, for the sellers, the risks are great, and few will be willing to take the logistical/execution risk beyond the end of the year. And Putin will have to decide if Russia will be willing to offer wheat beyond a couple of months as they currently are. It is an interesting tender, but we doubt that many will take the sizeable risk of offering 2025 export contracts.

• US June Census corn exports were 216.4 million bu or 30.8 million above the monthly FGIS estimate. US June soybean exports at 49.2 million bu were up 19 million from last year and slightly better than FGIS. For the September-June crop year to date, US Census corn exports are 247 million bu larger with US Census soybean exports 72.5 million bu larger that FGIS inspection data. July FGIS soybean exports were 48.3 million bu with corn at 192.0 million bu, Census exports will be larger. The USDA appears right at its 2023/24 US soybean export estimate of 1,700 million bu with 2023/24 corn export estimates being 25-40 million bu too low.

• China is active in booking 2-6 cargoes of US Gulf soybeans for October. USDA did not announce any new daily sales this morning, but we expect that they will on Wednesday and Thursday. China is using the break to add to forward coverage.

• The Central US GFS weather forecast at midday is like the overnight run with limited rainfall for the Central US over the next 10 days. The 7-day outlook is consistent with prior runs and our confidence in rain beyond the next week is low. It is the eastern US that will see all the rain from the remains of Debby. Dryness continues elsewhere. A moderation in Central US temperatures starts tomorrow, with heat holding across the S Plains and the Delta. Confidence beyond 10 days is low due to another tropical storm in the Gulf. Second half of August forecasts/outlooks will be changeable due to the tropic’s influence. Heat returns to the Midwest after August 14.

• A close above $5.405 Sept Chicago wheat will spark additional buying that could push values to $5.50 resistance prior to the USDA crop Report. Soybeans are a crop of August, and the Midwest weather forecast into mid-September matters for yield. Today’s soybean break is on limited volume and a recovery seems like a good bet for Wednesday amid an oilseed crush workers strike in Argentina. Bearish bets are totally based on rising US corn/soybean/spring wheat yields in Monday’s report. We maintain that US corn/soybean acres will both be cut by 1 milliona cres each on latent seeding.