Morning Highlights


Highlights                                 

  • Talks between the U.S. and China wrapped up yesterday afternoon, and Chinese state media says the two sides had, “candid, efficient and deep exchanges over major issues.” They also mentioned discussions on creating the conditions to allow China purchasing more U.S. ag products. However, a Chinese Foreign Ministry spokeswoman responded to President Trump’s tweets saying, “It’s pointless to tell others to take medication when you’re the one who is sick.” Negotiators will meet again in September in the U.S.
  • The Federal Reserve FOMC meeting ends this afternoon, and a 25 basis point interest rate cut is expected. The market will also look for hints from Chairman Powell of future rate cuts. The Wall Street Journal pointed out that the Fed may not want U.S. interest rates to differ too much from EU rates. The ECB has a negative 0.4% rate and has hinted at further cuts.
  • Mexico’s economy grew 0.10% in the second quarter on a seasonally adjusted basis, compared to analyst expectations of a 0.20% drop. Unadjusted, their economy was down 0.7% in Q2.
  • China’s PMI manufacturing index was up 0.3 in July to 49.7, the first increase in 4 months.
  • CHS will be attending Minnesota Farmfest in Morgan MN on Aug 6-8, please stop by booth 316 to visit. We will be providing daily market updates at 10:00 am. For more information please click here.
  • As of 7:00 am CT, crude oil is up 45 cents to $58.50/barrel, gold is up 1.80 at $1,431.50, DOW up 66 to 27,230, dollar index up 14, and Euro is down 85 pts.

Corn

  • Weather models are not agreeing on a 10-day temperature forecast, with EU warmer and GFS cooler, but neither forecast is threatening for the Corn Belt.
  • The EIA will release May biodiesel production and feedstock use today.
  • CZ19 closed a gap from 5/28/19 at $4.20 late yesterday, but there remains strong support at that level.

Outlook:  Sep futures up 2 ½ to down 1 overnight.. holding technical support for now, but fundamentals are bearish. Watch out for month end liquidation.

 

Oilseeds

  • Overnight deliveries:Soybeans 408, soymeal 404, soyoil 1,057
  • The USDA will release the June fats and oils report at 2pm CT, with soybean crush estimates averaging 159.4 million bushels. Soyoil stocks are estimated at 1.946 billion pounds.
  • China’s Dalian soybean futures were up 2 overnight, soymeal up 0.90, and soyoil down 9. Malaysian palm oil was up 9 ringgits.
  • Argentina is looking to break into the Chinese soymeal export market, as a Chinese delegation will inspect Argentine crush plants in August.

Outlook:

 

 

Nov beans up 3 ¼ to down 4 ¼ overnight..  trade talks didn’t bring anything new to the table, so we will likely drift lower as we wait for the Aug 12 USDA report.

                 

Wheat

  • U.S. Wheat Associates estimate SRW protein levels are averaging 9.2% and falling number 285, both the lowest in over 10 years. Test weights are averaging 57.9 pounds/bushel.
  • Jordan bought 60,000 MT of optional origin wheat at $229.50 for LH October shipment.
  • Agritel estimates the French wheat crop at 39.2 MMT, their second largest crop on record.

Outlook:  Sep KC wheat up 1 to down 2 overnight..  very small trading ranges, as wheat is mostly following corn.