Midday Comments: 8/3/2020

Corn edged barely higher on Friday, while soybeans & wheat settled moderately higher as traders closed out the last trading day of July with a whimper. News was limited during the session with weather patterns still showing expectations for relatively dry conditions across the northern Midwest, & continued wet weather for the mid-South.  In demand news, USDA reported that Mexico bought new-crop corn & the Philippines purchased new-crop soymeal for the US.  At Friday’s close, Sept. & Dec. corn futures each ticked 1/4c higher, August soybeans jumped up 5.75c, Nov. beans rose 4.25c, Aug. soymeal edged $0.50/ton lower, Aug. soyoil surged 0.93c/lb. higher, Sept. soft red winter wheat gained 1.75c, & Dec. SRW wheat rallied 2.75c. For the week, continuation charts of corn dropped 10.25c to a 13-week low, soybeans declined 7.25c to settle at a 3-week low & SRW wheat lost 8.25c to close at a 4-week low. For the month of July, the continuation corn chart slumped 22.5c lower, but soybeans were up 13.25c, & SRW wheat surged 41.25c higher.
 
Corn & soybeans worked higher on Sunday night as a hot two-week weather forecast supported those commodities, but wheat was pressured by a rebound in the US dollar & indications that Russian & Belarus wheat prospects have improved with recent rainfall.  Sunday afternoon’s NWS 6-10 & 8-14 day outlooks called for above-normal temps across much of the Midwest thru mid-August.  The northern Corn Belt saw below-normal rainfall during July even though the southern & eastern Corn Belt recorded above-normal precipitation.  Here at my Nashville, IL office, I measured 6.37” of rainfall during July.  St. Louis saw nearly 10” of moisture in one of its wettest/warmest Julys in history.  By contrast, the northern third of Illinois averaged about 10% below normal rainfall, & much of Iowa, east-central Nebraska, southeastern Minnesota & central Wisconsin recorded 25-75% below normal moisture during July.  At the 7:45 am pause in electronic trading, Sept. corn futures were up 1..5c, Dec. corn was 3/4c higher, Sept. beans were 4c higher, Nov. beans were up 5c, Sept. soymeal was $1.30/ton lower, Sept. soyoil was 0.57c/lb. higher, Sept. SRW wheat was down 6c, & Dec. SRW wheat was 7c lower.
 
Wheat extended its losses, corn futures traded on both sides of unchanged & soybeans trimmed its overnight gains as regular trading resumed on Monday morning.  Wheat was under renewed pressure after private Russian crop analyst IKAR boosted its Russian wheat production forecast by 1.5 mmt to 79.5 mmt, citing improved yields in the Volga & central production regions.  The ag ministry of the ex-Soviet state Belarus also predicted 2020 wheat output would rise to at least 8.2 mmt, up from 7.33 mmt in 2019 due to better weather conditions.  USDA has already forecast that ending global wheat stockpiles will rise to their largest ever in 2020/21, & forecasts for higher wheat output won’t improver that situation.    USDA’s Weekly Grain Export Inspections report for the week ended July 30 was again disappointing with corn & soybean inspections lagging far behind the paces needed to reach USDA’s old-crop export forecasts. Corn inspections (28.193 mb) were the 2.768 mb above last year, but the lowest since 4/16/20 & far below 48.8 mb average weekly shipments that are needed to reach USDA’s 1.775 mb export forecast for 2019/20.  Cumulative corn inspections since Sept. 1 stand at 1,493.694 mb—the worst total at week #48 since 2012/13.  Milo inspections (6.737 mb) were a 7-week high that was nearly 10-fold above last year’s pace, but China was the sole destination.  Cumulative milo inspections at week #48 of 178.064 mb are 104.913 mb above last year, but still the second-lowest since 2013/14.  Soybean inspections (20.266 mb) were a 4-week high, but shipments remained far below the 35.1 average weekly pace needed to reach USDA’s 1,650 mb export forecast. Cumulative bean inspections of 1,446.718 mb at week #48 are also the  lowest since 2012/13 as China continues to focus on South American beans this summer.  Wheat inspections (18.376 mb) were a 4-week low, but exceeded last year by 3.084 mb & were above the 16.9 mb average weekly shipment pace needed to reach USDA’s 2020/21 950 mb export forecast.  Cumulate wheat inspections at the end of market week #9 are a 3-yr high.  China shipped no US wheat & was only a minimal corn (0.021 mb) customer.  But that nation was the #3 bean shipper (2.645 mb) & only milo shipper. At 1:07 pm, Sept. corn futures were up 1/2c, Dec. corn was 1/4c higher, Sept. beans were 2.25c higher, Nov. beans were up 2.75c, Sept. soymeal was $2.30/ton lower, Sept. soyoil was up 0.79c/lb., Sept. SRW wheat was down 9.75c, & Dec. SRW wheat was 9c lower.
 
In export news, USDA announced on Monday morning that 0.294 mb of 2019/20 & 9.259 mb of 2020/21 US soybeans were sold to unknown destinations. On Friday, the farm agency reported that Mexico bought 4.500 mb of 2020/21 US corn & the Philippines purchased 222,000 mt of 2020/21 US soymeal. Weaker basis levels for July-August delivery during the past week at the Gulf of Mexico hints at a combination of sliding old-crop corn export demand even as late summer grain movement increased.
 
Locally, corn, soybean & wheat basis levels were steady on Friday.  For the week, nearby cash prices of corn tumbled 24c lower, of soybeans & wheat each declined 9c.
 
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"Closing Comments" are written by David Marshall, First Choice Commodities LLC, Nashville, IL.  To learn more about his farm marketing advisory or commodity brokerage services, contact him at dmarshall@firstchoicecommodities.com or call (618) 327-4370 (voice/fax) or (618) 314-0918 (cell). This commentary is not intended for specific trading strategies. We strive to insure this information is reliable, but we cannot guarantee its accuracy or completeness.  Commodity trading involves risks. You should fully understand those risks before trading.