Written Commentary
CORN
Prices were up $.05-$.06 while spreads were mixed. Sept/Dec widened to a new low trading at (.23 ¾). Both contracts gapped higher while stretching out to their highest levels since early June. Friday’s CFTC COT report showed MM’s were net buyers of 31k contracts in their most recent reporting period. At Friday’s close I’d estimate they were long just over 56k contracts. IMEA reports 2nd crop corn harvest in Mato Grosso (Brazil’s largest producing state) has reached 79%, just above the YA pace of 77% however below the long-term average of 85%. Safras & Mercado forecast Brazil’s 26/27 production will reach 145 mmt, up from 140.4 mmt in 25/26. The USDA forecast for 26/27 is 139 mmt.
SOYBEANS
Prices were sharply mixed with soybeans up $.18-$.23, meal was $3-$5 higher while oil was down 10-30 points in choppy 2-sided trade. Buying in Aug-26 beans seemed to dry up after trading above its March high at $12.31. Next resistance is its contract high of $12.49 ¾. Nov-26 closed above its May high with next resistance at its contract high of $12.41. Aug-26 meal traded to a 7-week high while Aug-26 oil for now rejected trade above Friday’s high. Crush margins fell back $.15 to $3.07 ½ bu. with bean oil PV dipping to 53.6%. MM’s were net buyers across the soybean complex extending their combined long position to 253k contracts at Friday’s close, roughly half of the record high in May. China’s record imports from June-26 at 13.55 mmt were largely from Brazil which at 12.1 mmt were up 14% from June-25. Imports from US at 1.27 mmt were down from 1.6 in June YA. YTD imports from the US at 9.3 mmt are off 42.4% from last year, while Brazilian imports at 34.75 mmt are up 9%.
WHEAT
Prices ranged from steady in MIAX to $.09 lower in CGO and KC with all 3 classes experiencing choppy 2-sided trade. CGO Sept-26 was down $.08 ¾ at $6.74, KC Sept-26 was $.08 ½ lower at $7.23 ¾ while MIAX Sept was up $.00 ½ at $6.92 ¼. Supply disruptions from the world’s largest exporter coupled with lower production in the US and EU will likely keep the path of least resistance higher despite today’s price pullback. I suspect today’s weakness partially attributed to comments from IKAR and SovEcon suggesting Russian wheat shipments are moving albeit at slower rates and at higher levels. IKAR reports Russia’s wheat export price ended last week at $235/mt up $7 from the previous week. SovEcon places Russian prices between $238-$241/mt up $9-$12 over the previous week. Argus lowered their French soft wheat production forecast 7.6% from YA to 30.8 mmt. MM’s were net buyers across all 3 classes, reducing their combined short position to 25k contracts, the smallest in 2 months. Wheat inspections at 8 mil. bu. were below expectations and well below the 13 mil. needed to reach the USDA forecast. YTD inspections at 78 mil. bu. are down 29.5% from YA vs. the USDA forecast of down 17%.
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