Written Commentary
MORNING AG OUTLOOK
Corn:
Strong action in the corn market Friday to finish out the week and heavy rains across parts of the Midwest over the weekend is giving the market a slightly higher start this morning. The Pro Farmer crop tour will encounter muddy conditions in the eastern belt today after more heavy rain over the weekend and is expected to find tipback in the western areas and flooding in the east. Black Sea attacks continued over the weekend. French conditions dropped another 2% to 29% G/E and private analysts now anticipate the crop could fall in half from last year, the lowest total since 1976. Argentina’s harvest has reached 89% complete, behind the average for this time of the year of 97%. Argentine producers have been very slow sellers of their corn crop this year but cheap prices resulted in a new record high export total for the month of July. COT data showed managed money increased their net long by just over 15,000 contracts to 166,770, well below the all-time high of 430,000 back in 2010. The US dollar is a positive for the corn market today, hitting its lowest price since June 15.
Soybeans:
Heavy rains across the already saturated areas of the central and eastern belt is lifting bean prices slightly this morning as additional storms are expected this week over Iowa and southern Illinois. The Pro Farmer crop tour begins today and will encounter muddy conditions from Iowa eastward through Ohio. COT data showed managed money increased their net long by 20% through the middle of last week in beans to 101,362 contracts, well below the all-time managed money net long in 2012 at 254,000. NOPA crush for July will be out later this morning and is expected at 221.5 million bushels that compares to 214.3 back in June and oil stocks anticipated at 1.45 billion pounds, down from June’s 1.501. There 120 bean deliveries over the weekend, 12 meal and 1 bean oil. SinoGrain will auction off another 360,000 tonnes of beans on Wednesday. Last week, China was a consistent buyer of a few cargoes at a time and that will need to continue this week to offset seasonal pressure.
Wheat:
The market is under moderate pressure this morning after making a new high for the month overnight. Surprise rains overnight moved across the Oklahoma Panhandle, far south central Kansas and northwest Oklahoma, which saw the best rains in weeks. Much more will be needed to recharge soil moisture before fall seeding can begin. The heat dome will continue to be centered over the southern Plains for the next 2 weeks. Black Sea attacks continued over the weekend with no end in sight. IKAR expects August Russian wheat exports to be down 55% from August a year ago. Commitments of Trader’s data showed managed money added to their net short position, which now stands at 31,401 contracts and decreased their net long in Kansas City to 27,662. Part of the strength late last week was due to Russia’s Foreign Minister saying they will intensify attacks on cargoes of western support for Ukraine and over the weekend a vessel was hit in the Odessa port, which Russia claimed was carrying military equipment. HRS conditions will be watched closely this afternoon after a major increase in area under drought over the past 3 weeks. El Nino concerns are also prompting some weather buying.
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