July 3 Morning Ag Commentary

by Steve Freed,

Grains are higher.  SX is up 3 cents and near 9.02. CZ is up 3 cents and near 4.29. WZ is up 3 cents and near 5.18. US Dollar is lower. Crude is higher. US stocks are higher. Gold is higher.

CBOT grains will close early today and will be closed tomorrow for Holiday. Trade will resume Friday morning. Higher overnight trade could be linked to managed funds evening up before the Holiday and weather and trade uncertainty. July North Hemisphere weather will be key for global corn, soybean and wheat yields.

Wire story goes on to say debate over U.S. corn plantings rages on in wake of USDA survey. Corn analysts were on the defensive on Friday, blaming the U.S. government’s procedures after its survey showed a very large number of planted acres relative to predictions despite a wet, record-slow planting season.

The U.S. Midwest weather forecast has the 6 to 10 day period looking to be a bit drier. Thunderstorms will work through from time to time favoring the west into next week.

The Southern U.S. Plains will see some hit and miss rains but be fairly quiet over the next 5 days. Limited rains are seen through next week. The Northern U.S. Plains will see close to average rainfall through the next 10 days.

The U.S. Delta and Southeastern states will see a seasonable pattern of isolated to scattered showers each day during the next two weeks.

The 11 to 16 Day Outlook still sees ridging in the west with the Midwest seeing average to a bit below average precip and average temps.

As China continues to deal with African swine fever there’s been a large shift of production to other forms of protein with poultry and aquaculture seeing growth; while the culling of the pig herd has hurt soybean meal demand, there may be some new demand from the poultry and aquaculture farming; an overlooked effect of this is that these animals have better feed conversions ratios and need less feed to produce the same amount of meat.

Brazil will produce a record corn crop of 99.7 million metric tons in the 2018-2019 growing season, according to one commodities and currency consultant.  The first corn harvest yielded 28 million tons; the second crop should reach 71.7 million tons.

Decline in corn open interest since early June has slowed. Increase in open interest over last few days could be end user adding coverage. CZ support is now 4.19 with resistance near 4.40.

Soybean open interest has dropped sharply during June. This could be due to drop in global trade especially China. 9.00 could be SX support. Resistance in near 9.20.

Chicago wheat open interest has also dropped sharply starting in early May. This could be due to short covering before US harvest. WZ support is near 5.00. Resistance is near 5.40.

The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.

2019-07-03T13:29:15+00:00 July 3rd, 2019|