Lower Grains

AM Grain Outlook

Grains are lower. SX is down 4 cents and near 8.95. CU is down 3 cents and near 3.22. WZ is down 2 cents and near 5.04. KWZ is down 2 cents and near 4.33. US stocks are lower. US Dollar is lower. Crude is lower. Gold is lower.

For the week, SRW Wheat prices are up roughly 2 cents; HRW up 7; HRS up 1; Corn is up 17 cents; Soybeans up 29; Soymeal up $12.00, and; Soyoil up 30 points. Crushing margins are down 1 cent at $1.00; Oil share unchanged at 34%.

Chinese Ag futures (January) settled up 22 yuan in soybeans, up 45 in Corn, up 33 in Soymeal, up 32 in Soyoil, and up 30 in Palm Oil. Malaysian palm oil prices were up 8 ringgit at 2,724 (basis October) at midsession.

The 6 to 10 day forecast for the Midwest is mixed with both models showing mainly dry. The GFS has a bit more moisture than the European model over the period; Temps are seen average to a bit below average over the next 10 days. The 11 to 16 day forecast for the Midwest sees some ridging early in the period bringing above average temps and limited rainfall before flattening out to allow for rains and cooler temps.

Interesting week for the grains. Soybean dropped to near 8.65 after USDA raised US 2020 soybean crop ratings. Confusion over US FSA acreage number sent SX up to near 9.02.BOU made new highs for the move near 31.83. SMU also jumped to near 293.8. CU went from 3.07 to 3.27 but at first on concern about Iowa corn crop then jumped even more due to FSA acreage numbers. WZ remain lethargic near 5.00. Most feel the FSA acreage rally is not justified. US farmer awarded the rally with big cash sales especially corn.  Russian and Baltic fob wheat prices continue to fall looking for export demand. Most do not look for any big news from US/China trade talks.

For the week ended August 8th, U.S. All Wheat sales are running 8% ahead of a year ago, shipments up 4% with the USDA forecasting a 1% increase on the year, U.S. Corn sales are running 12% behind a year ago, shipments 15% behind with the USDA forecasting a 20% decline, U.S. Soybean sales are running 2% behind a year ago, shipments down 4% with the USDA forecasting a 6% decline on the year, Soymeal sales up 1% on the year, shipments up 3% with a 3% increase forecast and Soyoil sales 45% ahead of a year ago, shipments 51% ahead with a 47% increase forecasted.

On Thursday, Managed funds were net buyers of 5,000 contracts of SRW Wheat; net bought 47,000 Corn; bought 13,000 Soybeans; net bought 7,000 lots of Soymeal, and; net sold 4,000 Soyoil. We estimate Managed Money net short 8,000 contracts of SRW Wheat; short 110,000 Corn; net long 60,000 Soybeans; net short 15,000 lots of Soymeal, and; long 48,000 Soyoil.

Preliminary Open Interest saw SRW Wheat futures up roughly 12,800 contracts; HRW Wheat up 1,000; Corn down 30,400; Soybeans down 2,200 contracts; Soymeal up 2,800 lots, and; Soyoil up 1,300.

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