Recent rains across the Midwest should keep yield prospects high for most of the Corn Belt. Both the 6-10 and 8-14 day forecasts are drier, but it is probably too late to have a negative effect on the crop.
December corn so far today dipped just below the August 12 low of 390 ¼. If this area can hold as near term support the chart may form a double bottom, but a break below this level would look technically weak.
US corn is said to be the world’s cheapest, which may lead to increased export business. Reportedly, US corn is about 40-60 cents per bushel cheaper than Brazil.
Crude oil is down sharply this morning, with September soybean oil hitting a new contract low. Soybean meal is also lower, contributing to the pressure on soybean futures.
US soybeans are globally competitive, but new crop sales still lag behind last year. Current total sales and shipments of old crop soybeans stand at 1.688 billion bushels, compared to 1.949 billion bushels last year. While new crop sales are behind the usual pace, China may step in to buy at these lower levels.
Yesterday’s NOPA crush of 182.9 mb was a new record for the month of July. Soybean oil stocks also declined to 1.497 billion pounds, below the trade guess of 1.608 billion and marked a seven-month low.
At the time of writing, Chicago wheat is near unchanged to a penny lower. The relative support for wheat (compared to corn and soybeans) may be coming from a lower US Dollar Index, as well as higher Matif wheat futures that are trading higher for the day, and are trying to recover from recent losses.
Russian wheat export values are said to be near season lows at $218 per mt FOB. This has been keeping pressure on global wheat markets as Russia remains the dominant exporter.
The International Grains Council is said to have lowered their estimate of global wheat production by 2 mmt to 799 mmt.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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