Morning Highlights


Highlights

  • Chinese paramilitary forces conducted exercises on the other side of the border with Hong Kong, raising fears these forces may be used to subdue the protestors. China has called the actions of the protestors near terrorism.
  • Equity markets are expected to open weaker again this morning after the Dow finished 800 points lower yesterday. China has said they plan to implement counter-measures in response to the additional US tariffs.
  • Retail sales, productivity, and weekly jobless claims are to be released this morning, possibly driving equity markets lower.
  • As of 7:25 AM CT, September crude oil was down $0.48 at $54.75. The dollar index was down 0.081 at 97.745, and Dow futures were up 86 points.

 Corn

  • Corn is higher overnight after a six-cent decline yesterday. The December contract is less than 10 cents away from the life of contract low at $3.63 ¾.
  • Fund selling has accelerated the market drop as global economic concerns have made their way into the commodity markets.
  • There are chances of rain over the next seven days that are more concentrated in the western Corn Belt. The eastern Corn Belt doesn’t appear to have much rain heading its way.
  • Export sales this morning came in at 56.1 tmt for 2018/19 vs. expectations of 100-300 tmt while 2019-20 exports were 307.6 tmt vs. expectations of 100-400 tmt.
  • Spreads: U/Z 11 cent carry; Z/H 12 ½ cent carry; Z/N 26 ½ cent carry.

 Outlook:  Mixed, bouncing back from yesterday’s drop but pressured by weak equities and energy.

 Oilseeds

  • Soybeans were stronger overnight, bouncing back from yesterday’s 11 cent drop. Weather in the next month is going to be very important for soybeans so forecasts are going to be heavily observed.
  • There have been no recent sale announcements to China as the dispute on trade continues to sour with China saying they are going to take counter-measures to the additional tariffs that are to go into effect on September 1st.
  • NOPA crush is expected to be at 155.8 million bushels with the range of estimates from 149.5 to 170.6 million bushels.
  • Soybean export sales were -110 tmt for 2018-19 vs. expectations of 50-300 tmt while 2019-20 exports were 817 tmt vs. expectations of 100-400 tmt. Soymeal 2018-19 sales were 130 tmt vs. expectations of 75-200 tmt and 2019-20 sales were 144 tmt vs. expectations of 100-200 tmt. 2018-19 soyoil export sales were 1.4 tmt vs. expectations of 8-22 tmt and 2019-20 sales were 0 tmt vs. expectations of 0-10 tmt.
  • There were 143 deliveries of August beans, 69 deliveries of August meal and 0 for soybean oil.
  • Soybeans in China were 5 cents weaker, soymeal was down 1.80 cents, and soyoil was up 22. Malaysian palm oil futures were down 40 ringgits at 2,200 ringgits.
  • Spreads: U/X 12 ¾ cent carry; X/F 13 ½ cent carry;

 Outlook: Mixed, bouncing back from yesterday’s drop but pressured by weak equities and energy.

 Wheat

  • Kansas City and Minneapolis markets were higher while the Chicago market was down 4 cents overnight.
  • US wheat markets are expected to trade in a sideways manner with winter and spring wheat harvest keeping a lid on futures.
  • Strategie Grains increased the 2019-20 soft wheat EU production by 2.3 MMT to 142.9 MMT, up 12% from a year ago. They also said exports would be higher with EU prices competitive on the global market.
  • Wheat export sales were 462 tmt for 2019-20 vs. expectations of 200-500 tmt.
  • Egypt has put a tender in to buy an unspecified amount of wheat from global buyers, lowest offer is from Ukraine for 60,000 MT.
  • Spreads: Chicago U/Z 4 ¾ cent carry; Kansas City U/Z 15 ½ cent carry; Minneapolis U/Z 11 ¼ cent carry.

 Outlook: Mixed trading in a sideways pattern after a sharp drop earlier in the week.