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Grains Are Lower, Risk Off

MORNING OUTLOOK

Grains are lower. Risk off. SH is down 13 cents and near 13.85. SMH is near 411.8. BOH is near 59.13. CH is down 3 cent and near 5.95. WH is down 6 cents and near 7.53. KWH is down 6 cents and near 7.71. MWH is unch and near 9.20.

US stocks are higher. Dollar is lower. Crude is lower. Gold and copper are lower.

Grains are lower on talk (what now?). USDA numbers have come and gone. USDA raised US 2021 corn and soybean crops but not as much as feared. Increase was increase acres not yield. USDA also raised US corn and soybean carryout but again not as much. USDA did increase both US and World wheat carryout. This was more than expected and continues to weigh on wheat futures. USDA lowered World soybean end stocks due to lower South America supplies. The drop was not as much as feared.

Soybean and corn are also lower on talk that next week some of the dry areas of south Brazil and Argentina could see needed rains. Key will be how much of the crops have been loss and what is the forecast. Better central and north Brazil weather could help harvest there. Paraguay might miss the rains. It will be hot across most of Argentina before the rains.

USDA added 53 mil bu to US 2021 corn crop and added 75 to ethanol use but dropped exports 75. A 1,540 mil bu carryout is enough for now unless there is an US 2022 crop problem.

USDA added 10 mil bu to US 2021 soybean crop but left the crush unch at 2,190 and exports at 2,050. Looks like USDA wants to wait another 30 days to adjust US demand. 350 US carryout is still low if the is either more weather problems in South America  or US.

USDA dropped US wheat imports 10 mil bu, lowered feed use 25 and exports 25. This increased US carryout to 628 which is negative. Most of the increase was in HRW.

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