Written Commentary
SOYBEANS
Soybeans ended lower after USDA shocked the market with a higher estimate of US Sep 1 stocks. USDA estimated stocks at 256 mil Bu vs 174 expected and 525 last year. USDA raised 2020 soybean crop from 4,136 mil bu to 4,216. They just carried this increase into Sep 1 stocks. The higher crop and stocks estimate could imply that a new revised 2021 soybean crop could also be increased. Weekly US soybean export sales were near 40 mil bu. Total commit is near 892 mil bu vs 1,396 last year. China has 11.7 mmt on the books with 7.1 mmt in unknown. Some feel China may still need 35 mmt US. Most of the post USDA comments suggested that SX could continue to slide lower and test 12.00 on the higher supplies. Palmoil prices are trending higher on talk of higher October demand. This is helping soyoil prices. Higher global rapeseed prices is also offering support to soyoil.
CORN
Corn futures ended lower but off session lows. CZ ended near 5.37. Range was 5.27 to 5.48. Early highs were linked to some speculative buying before the USDA stocks report and fact US domestic corn basis continues to trend higher. There continues talk that IL harvested corn yields may be a little lower than expected. IA yields are higher than expected despite dry summer and lower than average crop ratings. Weekly US corn export sales were only 14 mil bu. Total commit is near 996 mil bu vs 969 last year. China has 11.9 mmt on the books with 2.3 mmt in unknown. Some feel China may only need 16 mmt US. Canada is one source that may need more US corn than normal. USDA estimated US Sep 1 corn stocks near 1,236 mil bu vs 1,155 expected and 1,919 ly. USDA will have to lower 20/21 feed/residual on their next update. USDA also lowered 2020 corn crop from 14,173 mil bu to 14,111. This could imply that a new revised 2021 corn crop could also be lowered. CZ had an outside day and closed below Wednesday close. CZ could not trade over 100 day moving average near 5.50. CZ hit sell stops below the 50 day moving average near 5.40. CZ help support near 5.24 and the 20 day moving average. Managed funds reduced net longs.
WHEAT
Wheat futures ended higher. Fact USDA estimated both US Sep 1 stocks below the average trade estimate and final US 2021 wheat crop below the trade expectations offered support. Wheat future have been trending higher before the report as World wheat prices trend higher on tight World free stocks and a pick up in demand. USDA estimated US Sep 1 wheat stocks near 1,780 mil bu vs 1,852 expected and 2,158 ly. This implies higher Q1 feed/residual than expected and the entire year. USDA estimated US 2021 all wheat crop at 1,645 mil bu vs 1,680 expected. Final US HRW crop was 749 mil bu vs 777 pervious. SRW 360 vs 366 previous and White winter 166 vs 176 previous. US 2021 spring crop was estimated near 166 mil bu vs 176 previous. Weekly US wheat export sales were only 10 mil bu. Total commit is near 407 mil bu vs 514 last year. WZ ended near 7.25. Range was 7.01 to 7.32. KWZ ended near 7.31. Range was 7.03 to 7.37. MWZ ended near 9.12. Range was 9.02-9.20
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