Written Commentary
MORNING OUTLOOK
Grains are mixed. SX is unch and near 12.85. SMZ is near 341.7. BOZ is near 57.24. CZ is down 2 cents and near 5.24. WZ is unch and near 7.23. KWZ is unch and near 7.19. MWZ is up 4 cents and near 9.20. US stocks are higher. US Dollar is higher. Crude is higher and over $75.
EU and China energy prices continue to trade higher as nearby supply is below projected demand. US and UK prices could continue to trend higher if winter is colder than normal. Higher US energy demand and prices could help demand for ethanol. GSI commodity Index is making new highs led by energies.
This could be a big and volatile week in Washington. Trade will be watching if the massive spending bill is passed. Some feel that the bill could increase US debt and slow new equity investment and weigh on US Dollar as individual and corporate taxes may need to increase to pay for the new spending. Trade will also see if Congress can avoid a shutdown. This could impact USDA reports including USDA October crop report. USDA will issue Thursdays Sep 1 grain stocks ands small grain report.
Grains call are mixed. Seasonal pressure from harvest and slow start to US corn and soybean export sales pace offers resistance. Talk of tight US and World old crop corn, soybean and new crop wheat supplies offers support. End users are short and need to buy US corn and soybeans for export and drop in EU, Canada and Russia wheat milling quality offers support.
Rains are forecasted across parts of north and central Brazil. South Brazil and Argentina are dry. US Midwest will be dry which should help harvest. 2022 La Nina suggest dry and warm south half US, south Brazil and NE Argentina. West Australia could also drier than normal summer weather.
Some feel that with 22-25 pct of US corn crop harvested, yields suggest a US corn yield near 172-174 vs USDA 176. 13-16 pct of the US soybean crop could be harvested with yields suggest final US yield could be 1.5-3.0 bpa below USDA.
SX in 12.50-13.50 range until China buys. CZ also in 5.00-5.40 range until China and others buy. WZ in 7.00 to 7.40 range with tight World supplies supportive. US old crop cash corn and soybean basis firm on slow farmer selling. US soybean crush margins and ethanol margins remain positive.
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