Morning Highlights


Highlights

  • Rain continues to fall on Houston, TX as Harvey is threatening to shut down more oil refining capacity.

  • Energy markets are mixed with Nymex crude oil up 5 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 lower overnight, with many contracts seeing new life of contract lows on technical selling.

  • NASS rated the US corn crop 62% G/E, unchanged from a week ago. 6% of the crop is mature and 44% is dented.

  • Large spec funds continue to add to their short position, which is now estimated at a net short of 105,800 contracts.

  • Extended forecasts continue to show unseasonal colder than normal temperatures, causing concern about the later developing and unevenly maturing fields.

  • CU/CZ trades within a 14 ¾ * 15 cent overnight range. CZ/CH within a 12 ¾ * 13 cent carry.

Outlook: lower as the market deals with yield uncertainty

Soybeans

  • Modestly lower overnight as record crop prospects keep the market in defense mode after its recent 10 day trend higher.

  • USDA’s NASS rated the US crop at 61% G/E, up 1% from the previous week. They estimate 6% of the crop is dropping leaves while 93% is setting pods.

  • Weather remains cool but mostly favorable across the US. Heavy rain across the southern US may delay the early southern harvest. Snarled US logistics have stalled some grain movement across the impacted areas.

  • Overall demand remains stout from both the exporter and domestic crusher as farmer selling has slowed. Still seeing scattered pushes to posted bids for offers of quantity.

  • Technically SX appear to have run into resistance at $9.50, with yesterday’s high at $9.50 ½.

  • SX/SF trades at a 9 cent carry while SX/SN trades at a 33 cent carry.

Outlook:  Trading 4 to 6 lower with a record crop in the field

Wheat

  • The wheat market trades lower overnight as both HRW and SRW see new life of contract lows again. Supportive fundamental news is difficult to find in a market that remains oversupplied.

  • Egypt’s GASC tendered after the close yesterday, seeking offers for Oct 1-10 shipment.

  • Early seeding is expected on HRW soon after the Labor Day Holiday. Montana needs rain to recharge soil moisture as the current drought leaves little in reserve.

  • Large carries in the winter wheat markets keeps wheat in storage. KWU17/KWU18 is a $1.01 carry, WU17/WU18 is a 95 ¼ cent carry.

  • MGEx spreads continue to reflect a larger than expected production. USDA estimates US spring wheat harvest at 76% complete as some areas just begin to harvest in North Central North Dakota. Sprout damage has been limited.

Outlook: Trading lower as the wheat balance sheet is oversupplied and lacking demand