Morning Highlights


Highlights

  • Hurricane Harvey is now a Tropical storm unleashing devastating rain amounts across parts of Texas and Louisiana.

  • Energy markets are mixed with Nymex crude oil down 40 cents while RBOB and heating oil trade lower. The US$ is weaker.

  • First Notice Day for September futures is August 31st with all long positions being reported after the close on the 30th.

Corn

  • The corn market trades fractionally lower, matching Friday’s lows as fresh buying appears absent.

  • After the Farm Journal crop tour last week, Pro Farmer estimated the US corn yield at 167.1 bpa, with a possible range of 168.8 to 165.4 bpa. They pegged production at 14.093 bb.

  • Friday afternoon’s commitment of traders as of 8/22, showed large spec funds short 81,800 futures and options contracts. They were sellers late in the week to put them near an estimated short of 100k.

  • The CU/CZ trades a 14 ½ * 14 ¾ carry overnight as we head to delivery late in the week. The CZ/CH traded 12 ¾ * 13 carry overnight.

  • Some traders are concerned with cooler than normal temps. This week’s highs are expected to be in the 80’s from Decatur, IL to Lincoln, NE to Aberdeen, SD.

  • Harvest nears in parts of the southern and eastern US with silage being cut and test cutting in IN showing moisture content in the low 30s.

Outlook: fractionally lower as the market tries to decide what yield is important

Soybeans

  • Lightly mixed trade overnight as cooler than normal temperatures provide support.

  • Pro Farmer pegs the US soybean yield at 48.5bpa(+/-2%). They increased their harvested acres by 500t on initial FSA acres data.

  • Tropical storm Harvey dumps rains across parts of the US, possibly slowing early harvest.

  • A Reuters poll puts Brazil acres up 2.3% for 2017-18, but yields to return to more normal. The surveys projects production at 110.6mmt.

  • Large spec funds are currently short an estimated 54k. Friday’s COT showed them a reported net short of 56.1k. Spec funds are short soymeal and long soyoil.

  • Technically SX appear to have run into resistance at $9.50.

  • SX/SF trades in an 8 ¾ * 9 cent carry.

Outlook:  Trading slightly better on cooler temps and uncertain yield

Wheat

  • The wheat market trades lower overnight as supportive fundamental news is difficult to find in a market that is oversupplied.

  • Friday’s COT showed large spec funds and managed money continuing to add to their short positions.

  • Globally, both India and Australia are expected to receive rains in the upcoming 7-10 days.

  • Spring wheat harvest is expected to be near 75-80%.

  • Tropical storm Harvey dumps enough rain to slow the beginning of HRW seeding as saturated fields will be slow to dry.

Outlook: Trading lower on large SRW and HRW stocks to use ratios