By Steve Freed
Soybeans, soymeal and wheat closed lower. Corn traded higher. US Dollar was higher. Crude was lower. Benign US Midwest 30 and 90 day weather outlook offered resistance. Not sure which is more uncertain; US and China trade talks, US 2019 weather or USDA crop reports.
Negative old crop US soybean export sales and a benign 30 and 90 day US Midwest weather forecast offered resistance. Weekly US soybean exports sales were a negative 4 mil bu. China cancelled open sales. Total commit is near 1,788 mil bu vs 2,153 last year. USDA goal is 1,700 vs 2,134 last year. There were 30 mil of new crop sales; mostly to the unknown. USDA estimates US 2018/19 soybean total supply near 4.999 mil bu. Total demand is 3,929 of which 2,065 is crush and 1,700 is exports. This leaves 1,070 as end stocks. USDA estimates total 2019/20 supply near 4,771 with demand near 4,016. This leave end stocks near 755. SX is near the midpoint of the recent high near 9.48 and the May low near 8.15. As of Wednesday we estimate that they are net short 70,000 contracts. Supply bulls are looking for some USDA data confirming a lower US crop to spark a rally. Demand bears feel prices should test the lows.
Corn managed to traded higher. Some technical watchers might suggest this could signal a short term bottom. Futures are oversold. Weekly US corn exports sales were only 2 mil bu. Total commit is near 1,968 mil bu vs 2,369 last year. USDA goal is 2,100 vs 2,438 last year. USDA estimates US 2018/19 corn total supply near 16,590 mil bu. Total demand is 14.230 of which 5,275 is feed, 5,425 is ethanol and 2,100 is exports. This leaves 2,360 as end stocks. USDA estimates total 2019/20 supply near 16,311 with demand near 14,130. This leave end stocks near 2,181. CZ has taken out almost the entire rally in May and June do to wet weather. Managed funds have liquidated their entire net long and as of Wednesday we estimate that they are net short 17,000 contracts. Supply bulls are looking for some USDA data confirming a lower crop to spark a rally. Demand bears feel prices should make new lows. More debate over USDA and FSA estimate of US corn acres. Head of NASS said that corn acres include planted, use for silage and acres that may not get harvested. Does that mean that there are 90 mil planted corn acres and 11 mil prevent plant for a total of 101 or that we were going to have 98 mil planted acre but 11 did not get panted so final planted acres is near 87. USDA does not normally change acres on their September report. First chance to change acres will be in October when they have data from famers who signed up for crop insurance.
Wheat futures closed mixed. MLS and Chicago traded lower. KC wheat traded higher. Could have been some liquidation of long Chicago short KC spread at record high levels. In their tender, Egypt bought Russia and Ukraine wheat. Weekly US wheat export sales were 17 mil bu. Total commit is near 362 mil bu vs 305 last year. USDA goal is 975 vs 936 last year. USDA estimates US 2019/20 wheat total supply near 3,187 mil bu. Total demand is 2,173 of which 960 is food, 170 is feed and 975 is exports. This leaves 1,014 as end stocks. WZ is near season lows. As of Wednesday we estimate that they are net long 4,000 contracts. Demand bulls are looking for some new export and feed demand to spark a rally. World supply bears feel prices should test the lows.
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