Written Commentary
MORNING OUTLOOK
Grains are mixed to lower. SK is down 9 cents and near 13.93. SX is down 6 cents and near 12.56. SMK is near 401.1. BOK is near 52.17. CK is up 1 cent and near 5.79. CZ is up 2 cents and near 4.98. WK is down 7 cents and near 6.31. KWK is down 4 cents and near 5.82. MWK is down 7 cents and near 6.46. US stocks are lower.
For the week, SRW Wheat prices were up roughly 29 cents; HRW up 29; HRS up 52; Corn was up 17 cents; Soybeans up 2 cents; Soymeal down $6.00, and; Soyoil up 45 points. Crushing margins were down 10 cents at $0.54 (July); Oil share unchanged at 38%.
Chinese Ag futures (May) settled down 113 yuan in soybeans, down 22 in Corn, down 52 in Soymeal, down 100 in Soyoil, and down 216 in Palm Oil. Malaysian palm oil prices were down 41 ringgit at 3,726 (basis June) at midsession on higher production expectations.
There is talk that China may tighten controls on commodity prices. China Central bank asked lenders to tighten credit growth. US Fed Chairman suggested US economy near an inflection point. Looking for US economy to grow and unemployment to drop but warned virus could slow World economy. There are also headlines about inflation weighing on US equities.
US Midwest rains should fall across parts of NE, KS, OK, TX and south Delta. US Midwest 6-10 day forecast is colder than normal temps and below normal rains.
In Brazil, the 6-10 day sees rains to fall across most areas, with the possible exception of Minas Gerais. In Argentina, the 6-10 day has some mixed ideas from the models, with the GFS indicating things to be mainly dry across most areas, while the European sees totals of .25-.85” to be widespread.
On Friday US lowered US corn carryout to 1,352. US exports est near 2,675 vs some est near 2.800. USDA raised World corn feed use and exports and lowered World end stocks. USDA left US carryout near 120. Raised exports to 2,280 (+30) but dropped crush 10 to 2,190. USDA dropped World crush 1 mmt due to lower China. Raised World trade and lowered World stocks. USDA lowered US wheat feed use? Increased HRW stocks, and lowered HRS and SRW stocks. USDA raised World wheat feed use and exports and lowered World end stocks.
On Friday, Managed funds were net buyers of 7,000 contracts of SRW Wheat and 3,000 contracts of Corn; sold 6,000 Soybeans; 4,000 lots of Soymeal, and; 2,000 Soyoil. We estimate Managed Money net long 13,000 contracts of SRW Wheat; net long 437,000 Corn; net long 148,000 Soybeans; long 58,000t Soymeal, and; net long 71,000 Soyoil.
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