If you would like to receive our technical comments including price projections and cycle analysis for important tops and bottoms, click on the link at the bottom of the commentary to sign up for a 30-day free trial subscription. Follow Ag Watch Market Advisors on Facebook and Twitter for timely information not posted in
Corn Outlook:
The global geopolitical situation continues to be the primary concern for grain traders as world stocks are becoming tighter. Negotiations between the Trump Administration and Iran are in a stalemate, and the Ukraine-Russia conflict is escalating, threatening exports from the Black Sea. Because of the conflict, corn exports from Ukraine are forecast to decline 39 percent from a year ago to 14 million tons. While the U.S. may pick up some of the business, Brazil is a cheaper source. Meanwhile, weather concerns are fading as the heat in the forecast for the next couple of weeks will be accompanied by rainfall. However, the weather in July took a toll on the corn crop with the rating falling 6 points. This prompted the USDA to lower their yield estimate to 180.7 bpa from 183.0 bpa in July. Looking at exports, last week’s inspections were below the previous week at 68.5 MB. Right now, it is a photo finish in meeting USDA’s projection of 3.4 BB.
Bean Outlook
Optimism remains high of China purchasing the agreed 25 million tons of soybeans from the U.S. However, as mentioned before, whether they fulfill their agreement may rely on the outcome of the mid-term elections as President Trump’s leverage will weaken if the Democrats win the House. So far, China has purchased slightly over 4.5 million tons. Last week, export inspections were marginally higher than the previous week at 14.6 MB. Right now, it is nip and tuck as to whether USDA’s projection of 1.520 BB will be met. While weather in July took a toll on the corn crop, the rating for soybeans fell only 2 points. Meanwhile, the USDA lowered their yield estimate to 52.7 bpa from 53.0 bpa in July.
Wheat Outlook:
Wheat continues to be underpinned from the escalation of the conflict between Ukraine and Russia as 30 percent of the global exports comes from the Black Sea Region. Meanwhile, the EU is suffering from drought conditions, which will limit their exports and possibly swing business to the U.S. However, the U.S. is the most expensive source for wheat on the planet. Although export inspections last week were a marketing year high at 15.4 MB, they must average 15.5 MB on a weekly basis to meet USDA’s target of 775 MB. In other matters, the winter wheat harvest is almost finished at 91 percent complete, while harvest of the spring crop is 24 percent done compared to 14 percent a year ago and the average of 19 percent.
Comments and suggestions are provided for information purposes only. Information contained herein is obtained from sources believed to be reliable but not guaranteed to its accuracy or completeness. Readers using the information contained herein are responsible for their own actions. No presentations can be made that recommendations will be profitable or that they will not result in losses. This information is neither an offer to sell nor solicitation to buy of the commodity futures mentioned herein. The writer may be trading in the commodities mentioned