Written Commentary
MORNING OUTLOOK
Grains are mixed. SU is up 2 cents near 13.96. SX is unch and near 13.83. SMU is near 365.9. BOU is near 65.61. CU is down 2 cents and near 5.65. CZ is down 3 cents and near 5.55. WU is unch and near 6.54. KWU is down 1 cent and near 6.26. MWU is up 6 cents and near 8.79.
US stocks are mixed. US Fed Chairman not worried about inflation yet. Fed still committed to buy bonds. Crude is lower. US Dollar is lower.
Chinese Ag futures (SEP 21) Soybeans down 72 yuan ; Soymeal up 39; Soyoil up 92; Palm oil up 90; Corn up 10;Malasyian Palm is up 147. Malaysian palm oil prices overnight were up 147 ringgit (+3.66%) at 4168 extending its rally to a third day on concerns about production in top growers and stronger prices of major competing vegetable oils.
Since the rain soaked low of July 6, SU has rallied from 13.01 to 14.01, BOU 58.67 to 65.59, CU 5.20 to 5.71, WU 6.10 to 6.57 and MWU 7.78 to 8.79. USDA June acreage report was supportive. Dry Canada, ND and PNW weather also supportive. USDA failed to drop US corn and soybean yields in July but did drop the US HRS and durum crop more than expected.
Wednesday forecast of hot temps and dry weather across much of the west Midwest triggered sharp gains. Maps are same today. A persistent hot/dry pattern could stress corn and soybean there. East and south Midwest weather remain favorable for crops. Dry and hot west US Midwest weather could send futures even higher. Trade still volatile and machine dominated with few buy orders below the market and few sell orders above.
Weekly US corn export sales are est near 150-900 mt vs 371 last week, soybeans 200-950 vs 182 last week and wheat 200-500 vs 290 last week. Brazil fob corn prices have rallied over US. They may be out of corn for export and rumored to have bought 20 cargos of Argentina corn yesterday. Argentina Parana river lowest in 80 years. Brazil July soybean loadings only 4.4 mmt and they could be out of soybean for export. USDA est South America July-Sep corn exports near 27 mmt which could be 10 mmt high or 400 mil bu. China Q2 economy slowed to 7.9 pct vs Q1 18. Still above 6 pct annual goal. China Q2 pork production increased 40 pct or 7 year high.
E France, Germany, Poland and Balkans are too wet and raising concern about wheat quality. Russia spring wheat areas hot and dry. Russia spring wheat yield potential may be down 15-20 pct from last year. Australia wheat crop could be near 32 mmt vs USDA 28.5 est. They could reap higher export demand due to lower US white wheat crop being down 100 mil bu from last year. Egypt bought Romanian wheat $30 below French prices and $50 below US HRW.
On Wednesday, Managed funds were net buyers of 10,000 contracts of SRW Wheat; 17,000 corn, 13,000 soybeans, 7,000 soymeal, and 1,000 soyoil. We estimate Managed Money net long 5,000 contracts of SRW Wheat; long 231,000 Corn; net long 97,000 Soybeans; net long 30,000 lots of Soymeal, and; long 61,000 Soyoil.
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