July 17 Afternoon Comments

By Steve Freed


The soybean market traded both sides of unchanged with the trade already pricing in the favorable shift in the longer term weather.   A wet short-term forecast for key soybean producer Iowa helped to pressure the market early in the session but news that the USDA Risk Management Agency may already have a running total of 2-3 million prevent plant acres of soybeans as of early July. Yesterday’s news that President Trump could impose additional tariffs on the remaining $320 billion of Chinese imports if trade talks continue to stall continues to pressure prices. At midsession, November soybeans were trading up 1 cent at 907 with December soybean meal up $1.00 at $315.80 and December soybean oil down 0.21 points at 28.25. The open interest in soybeans went down 11,614 contracts on Tuesday with December soybean meal up 3,300 contracts and December soybean oil up 689 contracts.


December corn pushed up nearly 9 cents in the early morning trade from a low of 437 ¼ up to 446 on news that the USDA Risk Management Agency (RMA) was using a running tally of 7-8 million prevent plant corn acres as of early July, with final amounts expected to go higher. Recall, USDA Undersecretary Bill Northey said earlier this month that total prevent plant acres would go over 10 million acres. December corn is trading up 1 ½ cents at 450 at mid-session. The weather remains a mixed bag with very high temperatures in the near term for the Plains and most of the Midwest through this weekend. Beneficial rains in northern Iowa, southern Minnesota and Wisconsin are expected over the next 48 hours. The longer 6-10 and 8-14 day outlooks show cooler than normal temperatures and below normal precipitation for most of the Midwest from July 24th to the 30th. The peak pollination period for corn looks to fall from July 20th to August 10th, just 17% of the crop in silk stage as of July 14th. 

Today’s ethanol production for the week ending July 12 averaged 1.066 million barrels per day. This is up 1.81% vs. last week and up 0.19% vs. last year. Total ethanol production for the week was 7.462 million barrels. Corn used in last week’s production is estimated at 110.01 million bushels. This crop year’s cumulative corn used for ethanol production for this crop year is 4.81 billion bushels. Corn use needs to average 89.959 million bushels per week to meet this crop year’s USDA estimate of 5.45 billion bushels. Stocks as of July 12 were 23.365 million barrels. This is up 1.55% vs. last week and up 7.34% vs. last year. The open interest in corn went down 717 contracts on Tuesday.


Wheat markets held near unchanged during the first half of the session with Chicago September up ¼ cents at 507 ¾ and Kansas City September down 2 cents at 444 ¼. Egypt bought 60,000 tonnes of wheat this morning from Russia at an average price of $215.59 per tonne CNF. This was the first Russian purchase by Egypt since June 19th. So far for the season that started in July, Egypt has bought 770,000 tonnes with Romania the top supplier with 480,000 tonnes sold. Russian offers missed out on the previous two tenders and have sold 230,000 tonnes to Egypt for the season so far. Romania and Ukraine also offered wheat to Egypt today but their offer price was roughly $4.00 above the Russian offer. The Russian Grain Union lowered their wheat production estimate to 78.0 million tonnes from 82.5 million previously and lowered exports to 37.5 million from 45.0 million previously. Argentina’s 2019-20 wheat production is estimated at 21.5 million tonnes according to the Rosario Board of Trade. This compares to 19.0 million tonnes of wheat harvested last year. The last USDA estimate has Argentina’s 2019-20 wheat production at 20.0 million tonnes. The open interest in Chicago went up 3,849 contracts on Tuesday with Kansas City up 1,237 contracts.

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2019-07-17T21:46:06+00:00 July 17th, 2019|