Morning Highlights


Highlights                                 

  • World markets were sent into a panic by a tweet from President Trump yesterday that said he is imposing a 10% tariff on the remaining $300 billion of Chinese imports for a “short-term period.” The Chinese yuan fell sharply vs the U.S. dollar, as Trump accused China of devaluing its currency. U.S. 10-year treasury yields fell to their lowest levels since November 2016, while crude oil futures fell nearly 8%. China has not yet responded with any specific countermeasure.
  • The nonfarm payrolls report is expected to show 165,000 jobs added in July, with unemployment falling to 3.6%.
  • President Trump is expected to make an announcement regarding U.S./EU trade today at 12:45pm CT.
  • 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 130 cents to $55.25/barrel, gold is up 16.50 at $1,437.40, DOW down 69 to 26,474, dollar index down 210, and Euro is up 160 pts.

Corn

  • Forecasts are still generally favorable, with very mild temps. The Corn Belt forecast is dry this weekend, and then rain chances Tuesday/Wednesday and next weekend.
  • Funds trimmed an estimated 25,000 contracts from their long position yesterday, although open interest was up 12,800 contracts.
  • A private analyst estimates U.S. national average corn yield at 167.4 bushels per acre.
  • FranceAgriMer cut its French maize crop estimate for a 5th consecutive week, down from 67% to 61% good-to-excellent.
  • The USDA Grain Crush report for June showed corn used for ethanol at 456.6 million bushels vs 459.5 million last month and 462.7 million a year ago. Implied ethanol yield is 2.93 gallons/bushel vs 2.91 in May and 2.85 a year ago.

Outlook:  Sep futures up ¾ to up 5 ¾ overnight.. corn is recovering from two days of steep losses, and hopefully will see demand pick up at these lower prices. The continuous corn chart still has a gap at 3.84 ¾ which is also the 61.8% retracement of the recent rally.

 

Oilseeds

  • Overnight deliveries:1,218 soybeans, 620 soymeal, 611 soyoil
  • A private analyst estimates U.S. national average soybean yield at 47.2 bushels per acre.
  • The FarmLink crop tour estimates Canadian canola yield at 39.9 bushels per acre, up from 39.8 bpa last year, although they expect a slightly smaller crop at 19 MMT vs 20.3 MMT.
  • The June Fats and Oils report showed industry crush at 157.6 million bushels vs NOPA at 148.8 million and June 2018 crush a record 169.6 million. Meal production was 3.7 million tons, down 336,000 tons from last year.

Outlook: Nov beans down 2 ½ to up 7 overnight..  recovering from panic selling that may have been overdone. On the continuous soybean chart, 8.51 is the 50% retracement of our recent range.

                 

Wheat

  • Jordan is tendering to buy 120,000 MT of optional origin milling wheat for Nov and Dec 1-15 shipment. South Korea bought 85,250 MT of U.S. wheat for Oct shipment.
  • BAGE says the Argentine wheat crop is 99% planted at 6.55 million hectares. Conditions are rated 52% good-to-excellent, 44% normal, and 4% poor.
  • A crop tour of the Canadian Prairie Provinces estimates wheat yield of 52.1 bushels/acre or 3.5 tons/hectare, unchanged from last year and above the USDA estimate of 3.35 t/ha.

Outlook:  Sep KC wheat down ¾ to up 2 ¾ overnight..  wheat has some bullish fundamental stories but is caught up with the falling corn market.