THE OPEN

November beans:  3/4 higher

December meal:  .10 higher

December soyoil:  1 lower

December corn:  1 1/4 higher

September wheat:  3 higher

Prices opened on a mixed note with more wheat prices trading downward while the soy complex traded lower.  Traders were unwinding previous buy soy/sell grain trade.  December soyoil futures found support at the lows of the day which lent support to oilshare, which remains the more bullish component of the soy complex.

Beans took the brunt of selling as uncertainty continues over the status of China/US trade.  The amount of buying activity is not enough to meet Phase One deals, and a reported high level conference call is scheduled between the US / China August 15.  However, the major takeaway here is one of uncertainty, which is always a negative be it stocks are futures.  Funds were noted liquidating more of their bean length in lieu of this continuing tension. 

Higher outside markets in the energy and metals space lent some overall support to Ag prices as they sit close to lows.  

SOY

• The soy complex started with more fund selling in the bean space as good weather continues to weigh on price action.  November beans slipped lower and found light sell-stops under $8.80 which took prices towards the key support level of $8.72, and closer to the bottom of the trading range at $8.68/$8.71.  
• December soyoil spent the morning in congestion trade from key lows of 3080c to 3127c, while meal prices challenged lower support again at $290.00.  
• EIA report was positive for crude with stocks falling 7.4 mln barrels, with crude oil futures tacking on gains to trade to new highs at $43.52/barrel.  Spreads were slightly wider in beans with Sep/Nov trading out to 2 1/2c from 3/4c.  
• Sep. crush values firmed as bean prices fell to 91.07c/bu, while oilshare congested around 35.0% to trade back to 35.13%.  

GRAINS

• Wheat prices tumbled again after the open triggering sell-stops along the way.  September wheat fell towards a low of $5.06 where it found short-covering against the $5.05 level in early trade.  While the results of the wheat tender to Egypt await results, it is still noted that Russia remains the cheapest offer.   
• December corn prices were firmer as indicators for corn are flattening, suggesting that a short-covering bounce is probably on its way.  New lows in corn did seem to generate some buying interest in the export market, however, with some buyers completing tenders from South Korea.  
• In the big picture, the continuing ideal weather and large production continues to weigh on spreads.   Corn spreads widened out further to new lows, with Sep/Dec trading out to 12 1/2c from 11 1/2c, while Dec20/Dec 21 trading out to 41 1/4c from 39 1/2c.    
• EIA reported ethanol production declining 3% WOW to 931,000 bbl/day, which would utilize 4.93 bln bu of corn.  Ethanol stocks were unchanged.  Indicators for corn are flattening as prices continue to head into oversold status, which creates a mild dead-cat bounce.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                 hi                        lo

Nov bns:  4 lower                 8.84 3/4              8.76 1/4

Dec meal: 1.20 lower           293.00                290.00

Dec soyoil:  8 lower             3127                   3081

Dec corn:  1 1/2 higher        3.22 3/4              3.20 3/4

Sep wheat:  1 higher            5.12 3/4              5.06

Nov canola:  3.30 lower       492.40                487.00

OUTSIDE MARKETS

The markets opened 191 pts higher but continued to tack on gains into the midday hour, up 365 pts.  Reports of a possible agreement on a stimulus package helped to rally stocks.   Crude oil trades up to $43.52/barrel, while the US dollar sits at lows of 92.56 as US states grapple with the virus.  Gold prices surge to $2050.20/oz.  

CLOSING COMMENTS

Ideal weather is backing the negative seasonals for corn and beans for this time of the year.  Seasonally corn tends to make its lows in Sep along with wheat.  Exports to China, (as long as the Phase One deal lasts), will provide a cushion for bean trade, and may remain the pattern on breaks of size.  

Would still continue to own the soy complex on large pullbacks, while selling grains.  Today prices did see the flip as traders booked profits on inter-market spread trade.   

Traders continue to focus on the August 12 WASDE report.  By the time we get there, prices will have probably already factored in larger yields.  Traders are expecting USDA to adjust yields higher, and the report will contain a farmer survey.  

More numbers and private estimates for this report will be released periodically.  Hard to imagine that estimates could be much higher than what one firm has already thrown out, with a 54.1 bpa in beans, and a 184.5 bpa for corn.  Would consider this high-end estimate to be one of the most bearish heading into report day, and will be difficult to top.

Have a good evening.......

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America