Corn futures are trading slightly higher at the time of writing – the bounce yesterday and follow through today may be technical in nature. Futures are oversold and may be due for a correction to the upside, however, there has not been any major bullish shift in fundamentals.
Due to the recent rains across much of the Midwest, soil moisture levels should be sufficient for the next week or so, with drier weather expected. Additionally, temperatures are expected to be moderate over the next couple of weeks.
US corn basis is said to be firming, along with those in Brazil and Ukraine, and US corn export values are said to be competitive on a FOB basis. Due to dry and hot conditions in eastern Europe, and Ukraine in particular, Ukraine’s corn yields may decline by 30%-35%, according to the Ukraine Agrarian Council.
According to CONAB, Brazilian safrinha corn harvest is 75% complete, and their estimate of Brazil’s total corn production remains 5-6 mmt below the USDA’s projection.
This morning, August soybeans filled the chart gap left between Friday’s low at 1102 ½ and Monday’s high of 1101. However, at midday soybeans are off their session highs with deferred contracts having traded both sides of unchanged, indicating that this may be a dead cat bounce.
ANEC, a Brazilian export group, is anticipating Brazil’s July soybean exports will reach 10.7 mmt. Additionally, ABIOVE, a Brazilian oilseed processors group, increased their estimate of Brazil’s soybean crop to 153.2 mmt, which is above CONAB’s guess and closer to what the USDA is projecting.
Despite higher crude oil and palm oil values, soybean oil has reversed off early session highs and is trading mostly lower at the time of writing. Along with lower meal prices, this is weighing on soybean futures. US soybean meal is also believed to be overpriced compared to South America by $40-$50 per mt on a FOB basis.
Wheat futures are leading the grain complex higher at midday with double digit gains, reversing from yesterday’s lower close. This may also be a correction from technically oversold conditions.
Egypt is said to have purchased 770,000 mt of wheat in their tender. Russia fulfilled the majority of the deal at 720,000 mt, with Bulgaria supplying the remainder. Both French and Romanian offers were said to be priced much higher, causing them to lose out on the business.
Rostov, a wheat growing area of Russia, is said to have produced 11% of Russia’s total wheat crop last year. According to the Russian ag minister, that area has been affected by drought, floods, and frost, all of which could lead to harvest being down 38% in that region.
The US Dollar index so far today reached the lowest level since late March before recovering a bit. It remains sharply lower at midday and is lending support to wheat futures.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing by Stewart-Peterson and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Stewart-Peterson Inc. Reproduction of this information without prior written permission is prohibited. Hypothetical performance results have many inherent limitations. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The data contained herein is believed to be drawn from reliable sources but cannot be guaranteed. Reproduction and distribution of this information without prior written permission is prohibited. This material has been prepared by a sales or trading employee or agent of Total Farm Marketing and is, or is in the nature of, a solicitation. Any decisions you may make to buy, sell or hold a position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to Total Farm Marketing.
Stewart-Peterson Inc., Stewart-Peterson Group Inc., and SP Risk Services LLC are each part of the family of companies within Total Farm Marketing (TFM). Stewart-Peterson Inc. is a publishing company. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of National Futures Association. SP Risk Services LLC is an insurance agency. A customer may have relationships with any or all three companies.
