Written Commentary
SOYBEANS
The soybean complex closed mixed with beans up $.06 – $.09, meal up $6 – $8, while oil reversed closing down 25 – 35. Nov-23 gapped higher overnight as prices closed a gap on the charts from late July. Prices then retreated, eventually filling the overnight gap trading down to Friday’s low of $13.55 ½. Oct-23 meal closed just above its 50 and 100 day MA resistance near $399. Oct-23 oil surged to a 14 month high above $.67 overnight before pulling back. Spot board crush margins improved a few cents to $2.80 bu. as soybean meal regained .5% of product value. Could see a modest 1-2% reduction in G/E ratings for corn and soybeans tonight, with a much larger drop in next week’s update. The USDA announced the sale of 159k tons (6 mil. bu.) of soybeans to an unknown buyer. Last week MM’s were healthy sellers of just over 13k contracts of soybeans and 12k contracts of meal while being net buyers of just over 100 contracts of oil. Export inspections at 12 mil. bu. were in line with expectations. YTD inspections at 1.894 bil. are down 8% from YA, in line with the current USDA forecast.
CORN
Prices were down $.09- $.10 as Dec-23 rejected overnight trade above the $5.00 level. Prices also violated support at Friday’s low creating an outside day down on the charts. As expected temperatures soared over 100 degree’s across much of the western corn belt this past weekend, stretching as far north as SW South Dakota. Peak temperatures exceeded 110 in central KS along with eastern TX. Extreme heat and dryness is expected to last the majority of the week before the high pressure ridge flattens out bringing cooler temperatures and prospects for rain across the northern plains by the end of the week. Markets will also be sensitive to reports coming from the Pro Farmer crop tour this week. For the 2nd consecutive trading session the USDA announced the sale of 112k tons (4.5 mil. bu.) to Mexico. AgRural estimates the Brazil’s 2nd crop corn harvest has reached 77% in the center-south region by Aug. 17th. Export inspections at 19 mil. bu. were above expectations. YTD inspections at 1.423 bil. are down 33% from YA, in line with the USDA forecast.
WHEAT
Prices were lower across all 3 classes today having rejected the higher start overnight. The market has given back nearly all of Friday’s gains with Chicago and KC closing $.10 – $.14 lower, while MGEX down $.16 – $.20. Increased Ukrainian drone attacks on Russia appear to be offset by reports Ukraine is close to reaching a deal with Lloyd’s of London to insure vessels carrying their ag. products thru the Black Sea. Last week MM’s were net sellers of just over 10k contracts of Chicago wheat extending their short position to 65,590 contracts, while also being net sellers of nearly 5k contracts of KC wheat resulting in a flat position. Export inspections at 11 mil. bu. were in line with expectations. YTD inspections have reached 134 mil., down 19% from YA, vs. the USDA forecast of down 8%. Could see spring wheat conditions to hold steady at 42% G/E. Look for harvest to have advanced to 43 – 45%.
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