Written Commentary
MORNING AG OUTLOOK
Corn:
Yesterday’s inability to continue Monday’s rally shifted the edge back to the bears and prices are leaking lower again this morning. Rain potential over the central and eastern Midwest over the next week is bearish and crop stress in the western belt has not been acute enough to offset the strong conditions in the central and eastern crop regions, especially now that pollination is mostly over. Furthermore, the 6 – 14 day outlook has above normal precipitation for the Great Lakes and eastern belt with above normal temperatures pushed in the southern half of the US. Also June US corn exports were record high for the month and highly suggest USDA will need another old crop export upward revision of at least 50 million bushels in next week’s supply and demand report, which should bring ending stocks down a like amount if USDA does not change yields
Soybeans:
Weather pressure continues in the bean complex this morning with a new 1-month low in the November contract, which has closed lower 5 of the last 7 sessions. The bearish driving force is the chances for rain over the next 5 days across Missouri, Iowa, Illinois, southern Wisconsin and northern Indiana, prime production areas. The rest of the Midwest and Plains will see very light chances or no precipitation but the 6 – 14 day continues to show the heat relegated to the southern half of the US and above normal precipitation in the Great Lakes and eastern belt. A prominent clearing firm estimated bean yield at 53 BPA, right on USDA’s number. SinoGrain sold two thirds of the 500,000 tonnes of beans offered from the reserve as they continue to make space for US arrivals. Argentina’s maritime guide pilots went on a 1-day strike yesterday, but a deal was reached overnight, and the workers are headed back on the job today.
Wheat:
A steady start for wheat this morning but the market did test this week’s lows overnight. Increasing wheat supplies at Black Sea ports may exhaust grain storage capacity by early November, according to Ukraine’s Grain Lobby. Exports remain very slow and no vessels have entered the Odessa port in the last 2 weeks. Excess supplies are pushing domestic prices sharply lower in Ukraine and Russia as freight and insurance costs are up significantly. Russia’s July wheat exports were down 17 – 24% and August exports are anticipated down 32 – 43% year-over-year, according to IKAR. Ukraine says alternative export routes can only cover half of the restricted grain exports and new routes will not reach full capacity until the end of August at the earliest. The UK crop has suffered under the same heatwave that has plagued the EU and UK harvest is passing halfway complete, with crop estimates now the lowest since records began in 1984.
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