Morning Highlights


Highlights                

  • The China trade delegation canceled their US farm tour stops Friday, causing markets to end on a sour note.Chinese officials stated the visits would be rescheduled after early October trade talks.
  • Customs data show China’s pork imports for August were up 76%, with a total for the year at 1.164 mil tons.
  • Friday’s Sept 1 Cattle report highlights.Cattle on feed at 99% vs 99.3% estimate, placements at 91.0% vs 93.7% estimates, marketings 98% vs expected 98.3%.
  • Rains across much of the Midwest and northern states over the weekend.Flooding reported in the Dakotas.
  • U. S. Dollar index +.227 @ 98.69, Dow futures -19 @ 26,875, Crude Oil futures -.31 @ $57.78.

        

Corn

  • Friday’s CFTC report shows speculative funds net short 196,000 contracts [previous -167k]. The index fund net long dropped to +219,000 contracts from the previous week at 234k.
  • Corn open interest was down 11,000 contracts on Friday.

 Outlook: weekend rains will slow down any early corn harvest activity a bit. CZ19 is still holding above its short term moving averages, but still needs a fresh demand story to engage new buying.  The spec fund net short position was a little surprising and could lend a bid under futures.  Calls: +2

 

Oilseeds

  • Friday’s CFTC report shows speculative funds net short 69,000 contracts [previous -101k]. The index fund net long stands at 123,000, up slightly from the previous week.
  • There were trade rumors late last week of China going back and buying 4-5 bean cargoes out of Brazil for late year shipment. Soybean planting is getting started in Brazil.
  • Trade sources were talking of possible changes in Argentine bean and meal export taxes, that may be considered in front of coming elections. If taxes on meal are raised, it would make US meal more competitive.

 

Outlook: the China trade delegation skipped the scheduled US farm stops, which sent the bean market diving late in the session Friday.  Nov beans slipped back under the 100 day moving average [8.86], and closed right at the 50 day. Overnight action is turning higher.  Calls: 10-11 cents better

 

 Wheat

  • Friday’s CFTC report shows speculative funds in Chicago net short 45,000 [previous -45k]. KC -30,000 [prev -34k].In Minneapolis, specs are short a net 18,000 contracts.
  • KC HRW spot basis saw had 12.6% and 12.8% proteins up +24 to +1.82KWZ, with slightly better upticks for higher proteins.Spring wheat basis was up +40 to +50 cents to end the week.14% protein offers +160-170MWZ versus bids closer to +140MWZ.
  • CCC will tender for 69k tons of HRW for donation to Bangladesh on Tuesday.
  • Flooding reported in eastern N. Dakota areas, with some highways closed over the weekend.Rains in the Texas panhandle and parts of OK will aid in winter wheat seeding conditions in those areas.

Outlook: Minneapolis wheat was generating late week strength on quality concerns and wet weather hampering the tail end of HRS harvest. 20-25% of the HRS crop remains unharvested.  Cash market ideas firmed considerably. Sprout damage, low falling number, and late harvest delays on remaining acres are compounded the quality story.  The problems may spill over into Canadian harvest as well. And don’t forget about the barley crop!  Calls: 3-8 higher