Morning Wire


Highlights                

  • CHS Hedging will have one person one the eastern leg and one person on the western leg of the Pro Farmer Crop Tour that begins today. You will be able to follow and get tour updates from both CHS participants on twitter @hedgeit.    

  • On Sunday, White House economic advisor Lawrence Kudlow said American and Chinese trade negotiators will be holding one or more teleconference calls in the next week or two to lay grounds rules and discuss topics for new high-level trade talks. These calls will hopefully allow Chinese officials to visit Washington to resume negotiations.             

  • The trump Administration will reportedly grant a 90-day temporary license to Chinese telecom giant Huawei to continue to work with U. S. customers, despite security concerns.                                                                                                                

  • A/0 7:15 A. M. Crude Oil up 23 @ 55.10, Dow Futures up 271 @ 26,178, U. S. Dollar Index up 53 ticks @ 98.060.   

            

Corn

  • Commitment of Traders Report Friday afternoon revealed that fund specs in corn sold approximately 42,000 contracts thru Tuesday 8-13 to trim their net long position to 17,200 contracts. We estimate that activity through the close of 8-16-19 places their net spec long position in corn at approximately 13,200 contracts.                              

  • Rainfall over the weekend exceeded what most forecasts had called precipitation amounts to be. The heaviest amounts were in southern Minnesota, southern Iowa, eastern Kansas and western Missouri. Rains did extend into parts of Illinois and Indiana. More rain is expected this week favoring the northern and central plains, southern Midwest and the Delta. The 6-10 day forecast is trending cooler and wetter, thus further improving crop conditions.                            

  • Crop Progress Report is expected to show corn ratings mostly unchanged from last week.                                

Outlook: Timely weekend rains over dry areas are pressuring prices overnight nad early this morning. Pro Farmer Crop Tour results, weather and fund activity will provide price direction this week.                            

 

Oilseeds                      

  • Fund specs in soybeans were small buyers of about 3,800 contracts through 8-13-19 according to the Commitment of Traders report on Friday afternoon. This placed their net short position in beans @ 80,000 contracts. Taking into account activity through Friday’s close, we estimate the fund short in soybeans @ 89,000 contracts. Meal specs bought about 2,800 contracts last week to place their net short position @ approximately 38,100 contracts a/o 8-13-19. Late week activity through Friday’s close leads us to estimate the fund short in meal @ 42,100 contracts. Oil specs bought approximately 46,600 contracts last week to flip the net position to long 300 contracts a/o 8-13-19. Fund activity through Friday’s close took the net long in oil to approximately 2,300 contracts.                              

  • China sold 8,000 tons of 2011 soybean oil from their state reserves. The total amount sold represented almost 95 % of the total tonnage offered at the auction. In addition, China sold 32,522 tons of soybeans from state owned reserves. The total soybean tonnage sold was just over 53 % of the total offered at the auction.                        

  • Crop Condition report this afternoon is expected to show little to no change from last weeks 54 % G/E rating for soybeans.                                                       

Outlook: Lower overnight on rains across this weekend and anticipated rains for the balance of this week. Extended forecasts seem to be turning wetter and cooler. Pro Farmer Crop Tour results, weather and positioning ahead of August 30th FND will provide for price direction.                             

 

 Wheat

  • Commitment of Traders Report on Friday afternoon showed specs in SRW sold about 500 contracts last week to place their net short position @ 31,700 contracts. Small buying the balance of the week places their net short @ 30,700 contracts a/o the close on Friday. HRW fund specs sold approximately 10,000 contracts last week to place their net short @ 28,100 contracts a/o the close on 8-13-19. Small late week buying through the close on 8-16-19 leads us to estimate the fund short in HRW @ approximately 27,700 contracts. Minneapolis wheat shows funds short approximately 13,700  contracts futures only, while short approximately 14,800 contracts counting futures and options.        

  • Overnight, China sold 4,930 tons of 2013 imported wheat at auction from their state reserves. The tonnage sold was just about 3 % of the total offered at the auction.                                                

  • To this point in the observation period, VSR averages are 60.51 % of full carry for K.C. wheat and 27.71 % for Chicago wheat.                 

  • Romanian wheat is “effectively barred” from Algerian wheat import tenders in 2019, due to  Algeria’s strict 0.1 % limit on bug damage. This news is particularly important to France, Algeria’s main wheat supplier, who had anticipated increased competition for that business from Romania.                                                                                                                   

Outlook: Wheat prices are lower overnight following corn. Not much news, hopefully weather will cooperate with producers this week to allow for better spring wheat harvest. World stocks continue to grow, demand is slack, but U. S. should be in better shape to compete for business given price levels at this time.