Written Commentary
MORNING OUTLOOK
Grains are mixed to lower. SU is down 1 cent and near 13.43. SX is down 1 cent and near 13.35. SMU is near 356.9. BOU is near 61.16. CU is down 4 cents and near 5.50. CZ is down 4 cents and near 5.52. WU is down 4 cents and near 7.14. KWU is down 3 cents and near 7.02. MWU is up 1 cent and near 9.18. US stocks are lower.
US Dollar is mixed to lower. Crude oil is sharply lower. Gold is lower. Better than expected US jobs data rallied US Dollar. This weighed on some commodities esp Crude. Commodity prices also worried about new cases of Covid variants slowing economies.
West ridge should keep WCB warm/dry. ECB/south normal. 3 tropical storms in Atlantic. US weekend rains were in NE SD, SW IA, E MN, WI, MI. IL and N IN. IL rains may be weighing on grain futures. 2 week forecast suggest 60 pct ECB should see rain. WCB dry. Most est this weeks US corn and soybean crop ratings to drop 1-2 pct. Dry weather advance US corn crop.
Trade est US 20/21 corn carryout 1,096 vs USDA 1,082. 21/22 1,297 vs USDA 1,432. Key is total demand. US fob corn prices competitive vs Brazil corn and Black Sea feed wheat. US corn 25 cents below wheat.
China Jan-July corn imports 15 mmt +315%. On pace for 29-30 mmt total. Some est 21/22 30-25 mmt. CU flag formation support 5.41, resistance 5.83. Moving ave resistance 5.55, 5.58 and 5.70.
Trade est US 20/21 soybean carryout 148 vs USDA 135. 21/22 159 vs USDA 155. Key is exports. China needs to buy 2 mmt soybean per week. Jan-July imports 49 mmt or up +9% yoy, Crush margins negative. Brazil may be out of soybean export market next 6-7 months. US yield below 50.5 could suggest SX over 15.00. SU flag formation support 13.16, resistance 13.90. Moving ave resistance 13.62, 13.67 and 13.73
Trade est US 2021 wheat crop 1,723 vs USDA 1,746. Spring 325 vs 345. World wheat stocks 288.1 vs 291.7 est in July. Key WU support 6.80-6.90. Resistance 7.38. KWZ-CZ spread support +142, resistance +167. KWZ in uptrend with increase open interest. Resistance 7.30 then 7.51. Feb,2022 high 8.70-9.50? Trade est Russia wheat crop 74-77 mmt vs USDA 85. Canada 21-22 mmt vs USDA 31.5.
On Friday, Managed funds were net buyers of 3,000 contracts of SRW Wheat; 4,000 corn, 3,000 soybeans, even soymeal and 1,000 soyoil. We estimate Managed Money net long 12,000 SRW Wheat; long 252,000 Corn; net long 62,000 Soybeans; net long 23,000 lots of Soymeal, and; long 62,000 lots of soyoil.
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