August 3 Afternoon Comments

By Steve Freed


Mixed trade. Soybeans closed higher. Soyoil gained on soymeal. Corn closed higher. Wheat closed mixed. US Dollar was lower after the US jobs report. Crude closed lower.

Soybeans closed higher Uncertainty over US and China trade policy keeps the soybean market on edge. Resolution and prices may be too low. Increase tension and prices may be too high. This week, 2 private estimates of the US 2018 soybean crop that are higher than USDA July estimate could prove negative, if realized. USDA est US 2018 soybean crop near 4,310 mil bu with a yield near 48.5. Demand is est near 4,220 vs 4,251 ly. They had demand at 4,425 in June before they made an adjustment based on US/China trade war. This leaves a carryout near a record 580. 2 private est of the crop this week were from 4,445 to 4,574. This could add 135-264 to the already record carryout. This would weigh on prices. Most look for a drop in the fund soybean short on todays CFTC commit of traders report.

Soybean Futures


Corn futures closed higher. Fact one private crop watcher estimated the US 2018 crop lower than feared may have supported prices. Some feel a 2 bpa corn yield increase from USDA July guess could be absorbed by higher demand. At the same time the same private group lowered their estimate of World crop esp in EU which could have also help prices. Some feel funds could turn buyers of corn on talk that World exporter stocks to use ratio could approach record low in 2018/19. USDA currently est US 2018 corn crop near 14,230 Mil bu. Demand is est near 14,755 vs 14,910 ly. 2 private est of the corn crop this week ranged from 14,392 to 14,562. This could add 160-330 mil bu to the USDA 1,552 carryout is realized, Some could see demand increasing 150-200 mil bu to help offset the higher crop. Crop scouts report higher corn plant populations across the Midwest than expected. Ear length is shorter than last year. Most look for the funds to have covered last week some of their net short position.

Corn Futures Chart


Wheat futures closed mixed to lower. Some long liquidation from this weeks sharp rally may have weighed on prices. Bulls still feel drop in World wheat supplies could increase demand for US wheat that could increase prices. Increase US farmer selling once cash prices touched 6.00 may have offered resistance. Informa estimated US 2018 wheat crop near 1,825 mil bu vs USDA 1881. Winter wheat was 1,168 vs USDA 1,193. Other spring was 586 vs USDA 614. Informa dropped World wheat crop 6.5 mmt. Increase in Argentina could not offset drop in EU and US. Some feel final crop could drop another 20 mmt due to lower estimates than Informa in EU, Australia, Russia, Ukraine and Canada. Most look for managed funds to have added to their net long Chicago wheat futures position last week.

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2018-08-03T21:46:46+00:00 August 3rd, 2018|