Morning Highlights


Highlights                                 

  • The Federal Reserve did cut its key interest rate by 25 basis points to a range of 2% to 2.25%, the first cut since 2008. Fed Chairman Powell also hinted at the possibility of future cuts but was not a clear as the market had hoped. During his press conference he said, “This isn’t the start of a long series of rate cuts” but also, “I didn’t say it’s just one rate cut.”
  • The U.S. dollar index is up 700+ pts since the Fed announcement to an 8 month high, which is likely adding some difficulty to trade talks. Meanwhile, the British pound is down 0.4%, falling under $1.21 for the first time in two years.
  • 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 down 86 cents to $57.72/barrel, gold is down 20.30 at $1,405.80, DOW up 27 to 26,882, dollar index up 288, and Euro is down 535 pts.

Corn

  • Weekly corn export sales totaled 272,700 MT vs 150,000-400,000 MT estimates.
  • Datagro Consultoria estimates Brazil’s 2019/20 corn crop at 104.28 MMT, up 4.26 MMT, with exports up 15 MMT to 40 MMT.
  • Weekly ethanol production was down 8,000 barrels/day from last week to 1.03 million bpd and down 3.1% from last year. Ethanol stocks were up 779,000 barrels to 24.47 million barrels. Ethanol blending was 6.19 million barrels/day vs a 6.05 million 4 week average.

Outlook:  Sep futures up ¼ to up 2 ¾ overnight.. getting some bounce back after yesterday’s month end bloodbath. However, open interest was up 23,580 contracts yesterday and funds are still long over 100,000 contracts. Corn futures are down nearly 20 cents since the MFP payment plan was announced.

 

Oilseeds

  • Weekly soybean export sales were 143,100 MT old crop vs -50,000-250,000 MT and 305,500 MT new vs 150,000-450,000 MT estimates. Meal exports totaled 113,500 MT vs 150,000-450,000 MT estimates.
  • Datagro Consultoria pegs Brazil’s 2019/20 soybean crop at 125-126 MMT vs 116.76 MMT this year, and exports up 6.3 MMT to 78 MMT.
  • Overnight deliveries: soybeans 1,226 with JP Morgan stopping 128, soymeal 238 with JPM stopping 233, and soyoil 736.
  • China’s Dalian soybeans were down 4 ¼ overnight, soymeal down 1.40, and soyoil down 22. Malaysian palm oil was down 6 ringgits.

Outlook: Nov beans up ½ to down 3 overnight..  with weather benign, beans really need a pickup in demand.

                 

Wheat

  • Weekly wheat export sales were 383,100 MT vs 300,000-600,000 MT estimates and 660,000 MT last week.
  • Ukraine’s grain harvest is 86% complete, with 24.1 MMT of wheat and 7.8 MMT of barley. Their grain exports in July were up 54% from last year to 3.7 MMT.
  • StrategieGrains estimates the French soft wheat crop at 39 MMT vs 33.8 MMT last year and up 0.7 MMT from their previous estimate.
  • Algeria bought 570,000 MT of wheat at $215.50 C&F for Sep shipment, likely to be majority French wheat.

Outlook:  Sep KC wheat down ¾ to up 2 ¾ overnight..  wheat should be the cheapest offer into Mexico and Brazil at $195/MT FOB vs Argentine at $235/MT and Russian at $200/MT.