August 7, 2017
Grain Marketing Specialist
Export Inspections will be released at 10am CDT today; USDA Weekly Crop Progress Report will be released this afternoon.
CORN: As of 7:45 – Up 3
Small amounts of precipitation were seen in major US corn areas over the weekend, but heat stress is not an issue for now as cooler temperatures are widespread across the corn belt. We caught some support on Friday and continues a technical bounce this morning. However, with the board falling about 40 cents since the last high set on July 11th, producer selling in the United States has been nearly nonexistent. The South American farmer has also been feeling the pangs of low commodity prices lately, as they are well into their 2nd crop corn harvest and commodities are pressured by strengthening currency. In the southern US, harvest is well under way, and yields are being reported at higher levels than what was expected. It will be interesting to see what the USDA S&D report will bring on Thursday… be sure to get your targets entered! 3.75 Dec futures seems to be supporting the chart.
SOYBEANS: As of 7:45 – Old Crop Up 6, New Crop Up 8
Soybeans futures are also bouncing this morning after disappointing rainfall totals are calculated. The latest WASDE report suggests world soybean meal consumption will be 12.2 mmt higher in 17/18. China is the biggest factor in this, as their middle class continues to grow and demands for higher quality proteins. USDA projects that 17/18 exports will be at 2.150 billion bushels, which is 50 million bushels higher than 16/17. The soybean chart has seen quite a drop since beneficial rains and cooler temperatures have come to the Midwest, during a critical time period for soybean development. Along with beneficial rains in the US, we cannot forget about South America’s monster crop this year, which is our main competitor in exports to big consumers like China.
WHEAT: As of 7:45 – MPLS Up 5, KC Up 3
As Canadian crops show a decline in quality, we are again exploring the idea of a tighter world wheat balance sheet. Along with Canada and the US high plains weather troubles this year, Australia is also dealing with a drought and Germany has the opposite problem: too much rain is negatively affecting their crop, with an estimated 60% of the crop below feed quality. The Sept. Spring Wheat chart is bouncing around the 40-day moving average… and it has a lot of room to fall back to levels we were at in May.