Morning Highlights


Highlights                

  • The U.S. is placing mandated sanctions on Russia, due to their use of chemical weapons in a March assassination attempt in the UK. A law including “crushing sanctions” on Russia has also been proposed by Congress, in response to election interference. The Russian ruble is down 200 pts this morning, to its lowest since November 2016.
  • China’s Consumer Price Index was up 2.1% in July, with food prices up 0.5% despite a 9.6% drop in pork prices.
  • The USDA will release the August WASDE report tomorrow at 11:00am CT.
  • As of 7:08 am CT, crude oil is up 2 cents to $66.96/barrel, gold is up $2.00 at $1,214.60, DOW up 16 to 25,552, dollar index up 165, and Euro is down 305 pts.

 

Corn

  • The average trade guess for corn yield on Friday’s WASDE report is 176 bpa (171-180). Ending stocks are expected to rise from 1.552 billion to 1.636 billion bushels.
  • Weekly export sales were 554.5 MT old crop and 657.7 MT new vs estimates of 300-600 MT old and 400-900 MT new.
  • Conab estimates the 2018/19 Brazil corn crop at 82.18 MMT vs 82.92 MMT in July and 97.84 MMT last year. The safrinha crop estimate is 55.35 MMT vs 56.01 in July.
  • The Rosario Grains Exchange estimates 2018/19 corn plantings will be up 6% from last year, producing a 45-46 MMT crop.
  • Ethanol production in the week ending August 3rd was the second highest on record, at 1.1 million barrels/day vs 1.064 the previous week and up 9% from last year. Ethanol stocks were up from 923 million to 963 million gallons.

 

Outlook:  Dec futures down 1 to up 1 overnight.. 2019 futures are above $4 despite estimates around the world of higher acreage next year.

Oilseeds

  • Average trade guess for WASDE soybean yield is 49.6 bpa (48-51.5) vs 49.4 bpa last Aug. Ending stocks trade guess is 638 million bushels, up 58 million from July.
  • Weekly soybean exports totaled 954.3 MT vs 1000-1400 MT estimates. Soymeal sales were 129.5 MT vs 50-250 MT, and soyoil 10.9 MT vs 10-25 MT.
  • Conab estimates the Brazil soybean crop at 118.98 MMT vs 118.88 MMT in July and USDA at 119.5 MMT.
  • Chinese Dalian markets continue to rally, with soybeans up 21 ¼ and soymeal up 4.40 at last trade.

 

Outlook:  Nov futures down 5 ¼ to up 4 overnight. Running up against resistance at the 50 day moving average. Still no scheduled meetings between U.S. and China trade officials. 

 Wheat

  • Trade guesses for winter wheat are unchanged, while the average spring wheat estimate is down 13 million from July at 601 million bushels (570-633). Carryout is expected to drop 24 million to 961 million bushels.
  • The Southern Plains and Delta are set for heavy rains over the next 7 days, including 7+ inches in West Texas.
  • Weekly wheat export sales were 317.1 MT vs 300-500 MT estimates.
  • Strategie Grains lowered their EU soft wheat crop estimate by 4.7 MMT to 127.7 MMT, and reduced exports by 1.3 MMT to 19.8 MMT.
  • The Rosario Grains Exchange estimates Argentine wheat plantings at 6.32 million hectares, up 11% from last year.
  • According to Platts, grain trade from Russia into Turkey has "slowed significantly" due to the Turkish lira plunging against the U.S. dollar.
  • The Russian ruble fell over 2% in yesterday’s session, even before sanctions were announced. 

 

Outlook:  KWU8 down 10 to up 3 ¼ overnight. A third round of profit taking hit wheat yesterday, before handing the baton off to the lower ruble/Russia sanctions news.