Prices are lower across the board on slightly better than expected crop ratings for beans. Corn crop ratings were actually 2% lower, but did not avoid a pressurised sell-off courtesy of the soy complex. Bull spreads continue to weaken on quiet nearby demand for beans particularly, and a weakening of the inverses as funds liquidate. Processor beans are steady to lower as down-times are taken as crush plants await the supply of beans from harvest.
Corn inspections from yesterday showed that China loaded 25 tmt of beans out of the Gulf, in addition to 564 tmt of corn, and 52 tmt of sorghum. China took 276 tmt of corn off the PNW. Marketing-year-to date corn total is 2.472 bln bu, with USDA at 2.850 bln bu. Bean inspections were mainly to Mexico.
Wheat prices are slightly lower as Egypt’s tender for business was awarded to Romania for 60,000 tmt.
More private estimates are going to be released in front of the August 12 report. Those guesses may add more pressure to the market if they come in on the high side.
WEATHER – Temperatures will be milder across the Midwest but with that comes the lack of significant rainfall. Rains are reduced from eastern Dakotas to Michigan. Recent showers did benefit much of the US this week. Overall conditions remain favorable for filling beans in the south and east, while unfavorable conditions are still prevalent in the northwest. Favorable conditions are also noted in the Delta to reproduce beans. 6/10 day outlook is for scattered showers Saturday – Wed. particularly in the north.
Global: Recent flooding rains likely caused damage in central and northeast China.
REPORTS
Crop progress
beans: 60% good/excellent, up 2% and better than expected. Illinois and Ohio ratings improved by 3-6% while ratings declined in Kansas, Mo., and Neb. Blooming: 86% vs. 76% wk ago. Setting pods: 58% vs. 42% wk ago. Crops in the south and east are better than crops in the west.
corn: 62% good/excellent, down 2%. Silking: 91% vs. 86% average. Dough stage: 38% vs. 18% wk ago. Indiana and Ohio improved while the Dakotas were lower.
spring wheat: conditions at 10% good/excellent vs. 73% yr ago. Harvested: 17% vs. 4% yr ago.
winter wheat: 91% harvested vs. 84% yr ago.
Census crush:
June crush was 161.7 mln bu, below the advertised guess at 162.10 mln bu, and down from May at 173.5 mln bu, which would be the slowest rate of crush since June 2019. Soyoil stocks were 2.099 bln lbs, which was much over the advertised trade estimate of 1.990 bln lbs, but down from May stocks at 2.160 bln lbs. Meal stocks were 390,755 tons, down from 592,860 tons in May.
ANNOUNCEMENTS
Brazil’s AgRural forecast to produce 51.6 mln tonnes of Safrinha crop which is nearly 19 mln tonnes below 70.5 mln yr ago and the lowest in a decade.
Russia’s SovEcon cut its forecast for Russin crop to fall to 76.5 mln tonnes vs. 85 mln tonnes starting point.
Brazil exported 8.666 mmt of beans in July vs. 9.955 mmt yr ago, while corn exports were 1.983 mmt of beans vs. 3.979 mmt yr ago, as reported by the Secretariat of Foreign Trade, (Sexec), in an August 2 report. The article stated that “farmers are hoarding stocks which raised supply concerns, which may in turn support US bean demand”.
Calls are as follows:
beans: 25-28 lower
meal: 4.00-4.50 lower
soyoil: 100-120 pts lower
corn: 4 1/2-5 1/2 lower
wheat: 6-8 lower
Outside markets show crude oil prices are down to $69.73/barrel, and the US dollar down to 91.89. Stocks are up 80 pts.
Tech talk: The Nov. bean overall trading range is sideways but the weak ADX trend at 11 continues to keep prices bounded on both sides with resistance intact at $13.80 and support under the market at the lowest end at $13.00. For now, prices are trending downward and take out the 100 day moving average of $13.32 triggering sell-stops to target $13.15 again. December meal price action is sideways but multiple tops formed as prices rallied last week to $361.00-$363.00 without moving over. As such would look for prices to trend back towards $350.00, with a stop at major support at $355.00. Buy meal/sell soyoil trade could find meal prices cushioned at these lows, but is still a good opportunity to price. December soyoil corrects down to the lows of the last big break which is located at 6058c. Again the market is in a sideways trade, and will be interesting in lieu of fund length, (long 55K), to see if the cycle low can now hold. If needing to price, the 6050c-61c level still is a good place to start, but if 6050c gives way, can be patient and wait for 60c.
The December corn chart is a bit more interesting, as prices are pulling back from the $5.59 – $5.60 resistance level but losses are relatively shallow. Overall trading range is now sideways, but the 100 day moving average is located at $5.40 and prices so far do not seem to be wanting to go down there quickly. Look for $5.40 – $5.60 to remain intact as a value range for now. December wheat prices also are in corrective mode with a pullback from highs of $7.41 1/2. However, this is also a fairly shallow pullback and the chart has not set an overall rally top. IT is typical for strong markets to print a fresh top when a strong rally occurs with a minor setback. As such, trendline resistance crosses today at $7.45 to $7.48, and due to strength factors think we go there.
DECEMBER MEAL: Decidedly going nowhere, the chart has a still trapped sideways trade from lows of $348.00 to high in mid-July at $375.60. Despite a solid trade yesterday, the major direction still remains sideways, leaving plenty of room to trade sideways from $350.00 to $365.00. Buyers likely remain patient as a result of sideways price action. Would continue to price at trading range lows, which may be seen again though the downward momentum has slowed. Big picture analysis is that trade above $365.00 will be needed to turn the price action up. Until then, easy does it as prices wander back and forth between the red lines. The building lines of resistance on the lower blue line is more negative, however, as prices this AM trend down away from multiple tops.
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