Morning Highlights


Highlights

 

  • Equity market are on the defensive as the US/China trade war escalates.  Also pressuring equities is the possibility of more rate cuts by the Fed late this year.  The S&P is coming off its worst week of the year last week. 

  • The US/China trade war appears to be kicking off a currency war with China.  The Yuan exchange rate went above 7 for the first time since 2008.

  • The Chinese government has asked state owned entities to stop buying US ag products.

  • Hog futures were limit down on Friday and will have expanded limits today.  

     

Corn

  • Dry weather is expected to persist across most of the corn belt.  The drought monitor shows pockets of drought expending in Kansas and on the Iowa/Illinois border.

  • Speculator continue to cut their corn length.  In the past 2 weeks, funds have cut their net length in half and now have of a position of 74,000 contracts long.

  • Global corn prices show Argy and Brazilian corn at much cheaper values than US supplies.

 

Outlook:  7 cents lower as all of the ag markets are pressured by trade war tensions.

 

Oilseeds

  • Speculators have not changed their overall position in the last month.  Their position on July 9 was short 62,000 contracts.  The latest data shows them with a short position of 63,500 contracts.

  • The French rapeseed crop is projected to be much lower this year at 3.6-3.8 million tons.  This is about 30% below the 5 year average.

  • China said they have honored their grain purchase obligations from the US by buying 130,000 tons of soybeans since July 19th

  • Palm oil stocks are at the highest level of the last 3 months.  Despite the higher stocks, prices have been trending higher.  Palm oil futures were up 31 points to 2064 overnight.

 

Outlook:  10 lower as US/China tensions are heavily pressuring the market.

 

Wheat

  • Russia’s IKAR agency has lowered its wheat crop estimate by 900,000 tons to 75.5 million tons. 

  • Wheat futures settled Friday right on the 200 day moving average. 

  • Spring wheat harvest should get underway in parts of North Dakota if the weather cooperates. 

 

 Outlook: 2 cents lower in Mpls, but 8 lower in Chicago as the trade was pressures hit all markets.