Morning Highlights


Highlights                

  • The J.M. Smucker Co. announced it was selling off its US baking business to a private equity firm Brynwood Partners.
  • President Trump is preparing to release a list of additional Chinese products subject to US tariffs, including juice and seafood.
  • The CME announced a change to delivery storage charges for corn and beans, increasing rates from approximately .05 per bushel per month to .08 per month beginning in the fall of 2019.
  • The USDA July S&D report will be out Thursday 7/12/18. July futures go off the board this Friday.
  • USDA also announced yesterday they would end advance press release access to WASDE and Farm Data reports. The change would be effective Aug 1.
  • Still time to register for CHS Hedging grain hedging classes for July 24th and Compass contract classes on July 25th in IGH.
  • The 10 day forecasts began to show slightly better chances for moisture across the US, but heat remains in place into this weekend.
  • U. S. Dollar index +.181 @ 94.336, Dow Futures -206 @ 24,720, Crude Oil futures -.48 @ $73.62.

        

Corn

  • CZ18 failed to retake the 10 day moving average [3.67] after the re-open yesterday, and seemed to generate further technical selling the rest of the session.
  • CME corn delivery storage rate change to .08/month will take effect at the expiration of the Dec19 contract.
  • Yesterday USDA announced 152,000 tons of US milo sales canceled to Mexico.
  • The average trade estimate for the USDA July report corn yield is at 174.9 bpa [June @ 174.0], with average production estimates coming in around 14.269 bil bushels. The June number was 14.040 bil.Several private firms have ultimate yield estimates averaging 175.7 bpa.
  • CONAB lowered Brazil corn production to 82.9 mil tons, down 2 mil from previous.

 Outlook: so the corn market couldn’t go higher and decided to make a retest of the lows the ‘trade de jour’. This by the way generated new contract lows in Dec corn. Generally, traders may have focused on the coming updated balance sheet looking bearish with more acres and steady to higher yields calculated in. More tariffs bring negative trade overnight. Calls: 3-4 lower     

 

Oilseeds

  • The average trade estimate for the USDA July report bean yield is at 48.6 bpa, with average production estimates coming in around 4.314 bil bushels. June estimate was at 4.306 bil.
  • CME soybean delivery storage rate change to .08/month will take effect at the expiration of the Nov19 contract.
  • CONAB raised their Brazil bean production estimate to 118.8 mil tons. USDA is currently at 119 mil.

Outlook: beans did what we thought they would do, venture either side of unchanged yesterday, and closing the same. Overnight the administration announced another layer of tariffs against Chinese ag and horticulture products, thus sending beans for another dive and back to contract lows [SX $8.55]. Calls: 10-15 cents lower

 

 Wheat

  • SWW harvest is just getting starting in Oregon. Michigan ramping up SRW harvest.Some noted SRW quality concerns in Pennsylvania with elevated vomitoxin levels.Otherwise, winter wheat harvest is wrapping up this week in most areas of the Midwest.
  • GASC wheat tender results had them buying 175k tons Russian wheat from $219.35-$221.00/ton C&F.Fob values were $203.65-$204.50/ton.
  • KWU18 slipped back ‘into the gap’ left last Thursday. WU18 filled its gap from last Thursday, and found renewed selling as it traded back below its 10 day moving average [4.88].

 

Outlook: another tough day on tap for wheat markets yesterday. Likely a touch of technical selling coming from KC as the Sept chart was showing the 50 day average crossing thru the 100 day to the downside.  Never a positive signal for most. And the previous moves were not holding above the 20 day average. Chicago also lost any technical traction, and sellers reloaded. US fob values are getting close to competitive with Russian and EU levels now. Next week may bring some moisture and temperature relief to Europe and Black Sea wheat areas. Weaker this a.m. with other markets. Calls: 4-7 lower