Written Commentary
OPENING COMMENTS
MACROECONOMICS:
Beginning October 14th, Chinese ship-owners and operators that dock at US ports will be charges $50 per ton of cargo. These charges are expected to increase each year for the next 3 years, adding $30/ton each year. This development presents lower fees than previously expected. Any non-US built ship will be charges $150 per vehicle on board. Empty vessels that arrive to pick up bulk exports like grain and coal will be exempt from charges. There is alot of time between now and mid-October, so this change will likely be negotiated. Today we are expecting an announcement around the weekend trade talks between the US and Japan. I have heard mixed speculation with concerns that Japan is seeking a more fair deal. The US dollar is weaker on the index to start the week, now at 98.18.
AG FUNDAMENTALS:
The weaker dollar is helping support commodity prices, but it has overlaying concerns of a weaken confidence in the dollar as the global currency cornerstone. Corn planting progress will be reported alter today. Expecting to be below 10% planted so far in the US; this time last year corn was about 11% planted. Rains are still slowing progress in Texas, Oklahoma, Arkansas and Kansas today. Parts of the southern Midwest may still need a dry day or two to allow for fieldwork. No quality concerns are being expressed about Brazil’s first corn crop, now on the back half of it’s harvest. Argentina’s corn crop harvest is underway and quality is also on par. Brazil’s second corn crop expected to shell on time toward the beginning of June. The Russia wheat crop has gone from 37% poor to very poor late last year to about 90% in good to satisfactory condition. Russia winter wheat will be harvested in July/August. The Commitment of Traders Report last week was green across the row crop board with soybean and canola managed money positions flipping from short to net long. Soybeans had the largest change to the MM positions, adding over 76K long contracts..
CTFC Commitment of Traders Disaggregated Futures and Options shows a week of purchasing from the money managers. Soybeans had the largest change and brought the MM position net long over 26K contracts. Corn a close second as the Money manager extend their length above 124K contracts.
Change in Managed Money Positions:
Corn: +70,997
Soybeans: +76,616
Soymeal: +28,030
Soyoil: +10,834
Chi Wheat: +5,693
KC Wheat: +2,462
Canola: +48,553
Export & World News
Algeria is thought to have purchased up to 630K MT of milling wheat in an international tender that closed on Wednesday. Tunisia is also believed to have bought a 75K Mt of soft wheat
Malaysian palm oil futures were down 64 ringgit overnight, now at 3911.
Daily Trading Limits: Corn $0.30 (expanded $0.45); Soybeans $0.85 (expanded $1.30); Minneapolis Wheat $0.60 (expanded $0.90); KC Wheat $0.40 (expanded $0.60); Chicago Wheat $0.40 (expanded $0.60)
Weather Outlook
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