August 16 Afternoon Comments

By ADMIS Research Team


News of a restart of trade talks with China sparked a higher push in soybean prices today. A trade delegation is expected to come to the US in late August. November soybeans trading at 892 ½, up 23 ½ cents at midsession. The market pushed up to 899 ½ early in the day. December soybean meal is at $336.50 up $5.20 at mid-day which left December crush down 10 cents at $1.60. Support was also seen from rainfall over the past 24 hours that was a bit of a hit-or-miss event, with some areas getting one inch or more and others just one-tenth of an inch. Southeast Iowa, southern Illinois, Indiana and Ohio received the best coverage. Another system has crossed South Dakota and western Iowa overnight and should work its way into northern Illinois later today. All told, the combined seven day total precipitation should be impressive, but some areas in the Midwest may only receive 0.50 inch. This is much less than the projections earlier this week. Yesterday’s July NOPA crush came in at 167.73 million bushels versus the average estimate at 161.4 million bushels and compared to 159.2 million bushels in June. The crush came in at the second highest monthly crush on record following only the March of 2018. Oil stocks came in at 1.764 billion pounds versus the average estimate of 1.738 billion pounds and compared to 1.766 billion pounds in June.

Soybeans Futures Chart


Commodity markets have experienced a bit of a bounce back today which has supported corn prices. The news of the US and China restarting trade talks later this month, albeit on a low level basis, has also supported prices. December corn traded at 379 ¾, up 3 ¾ at mid-day. A solid export sales figure this morning was also supportive with weekly export sales coming in at 339,000 tonnes for the current marketing year and 1,044,800 for the next marketing year for a total of 1,383,800. As of August 9, cumulative corn sales stand at 14.8% of the USDA forecast for 2018/2019 (next) marketing year versus a 5 year average of 15.8%. Sales of 908,000 tonnes are needed each week to reach the USDA forecast. The latest GFS precipitation forecast has slightly less rainfall amounts into next week, but beneficial rains are expected in Nebraska, South Dakota, Missouri, Iowa, Illinois, Indiana and Ohio over the next seven days. The open interest in corn went up 1,951 contracts on Wednesday.

Corn Futures Chart


The wheat market is getting some spillover support from news that the US and China will resume trade talk negotiations later this month. Support was also seen from a rare flash sales announcement of 200,000 tonnes of wheat sold to Iraq. The weekly export sales figures were well above the estimates coming in at 803,000 tonnes for the current marketing year and none for the next marketing year for a total of 803,000 tonnes. As of August 9, cumulative wheat sales stand at 29.8% of the USDA forecast for 2018/2019 (current) marketing year versus a 5 year average of 44.0%. Sales of 463,000 tonnes are needed each week to reach the USDA forecast. World production levels are still in question and should provide underlying support. European weather looks dry through the month of August and Australian showers will be confined to the far southeastern sections. The open interest in Chicago went down 5,259 contracts on Wednesday and Kansas City went down 5,181 contracts on long liquidation.

Wheat Futures Chart

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2018-08-16T20:39:23+00:00 August 16th, 2018|