Morning Highlights


Highlights

  • Harvey moves inland as it continues to threaten refining capacity and crops.

  • Energy markets are firm with Nymex crude oil up 21 cents, RBOB and heating oil also trade higher. The US$ is stronger.

  • First Notice Day for September futures is today, August 31st.  All long positions will be at risk of delivery.

Corn

  • The corn market trades fractionally mixed overnight, holding above yesterday’s contract lows until about 7am when we saw new contract lows on CU and CZ as we see some month-end positioning.

  • The poultry sector remains in expansion with broiler egg-sets and chick placements at 103% of last year.

  • Export sales estimate: 0 to 200tmt old crop, 400 to 700tmt new crop.

  • Cooler than normal temps next week worry some traders as some of the crop needs more time to develop. The coldest weather is expected around the full moon on Sep 6 as northern areas are expected to see low temperatures in the low 40s.

  • Farmer selling has been limited to DP and basis contract pricing with a few “throwing in the towel” on cash bushels. New crop sales have been nearly non-existent.

  • Large spec funds continue to add to their short position, which is now estimated at a net short of 113,800 contracts.

  • CU/CZ trades at 15 ¾ carry overnight, CZ/CH at 12 ¾ * 13 cent carry and CZ/CN trades at 26 ½ cent carry.

  • Deliveries of 844 contracts.

Outlook: Fractionally mixed trade as the farmer has some decisions to make

Soybeans

  • Soybeans are slightly higher on the nearby contracts as prices consolidate in a choppy, sideways trading range of roughly $9.20 to $9.50.

  • US weather remains mostly nonthreatening for now as warmer temps give way to cool nights next week. Frost threats remain limited in scope and a remote possibility in far northern growing areas.

  • Seeing some light oil/meal spreading again overnight as soymeal threatens to expand the lower end of its trading range and SMV tests prices last seen 18 months ago.

  • Domestic crushers try to balance demand against origination to get to new crop harvest. World demand remains strong from China.

  • SX/SF trades at a 9 ½ cent carry while SX/SN trades at a 34 ¼ cent carry.

  • Export sales estimate: -600 to +200tmt old crop, 1.0 to 1.5mmt new crop.

  • Deliveries: 1 soybean, 200 soymeal, 667 soyoil.

Outlook:  Trading steady/better to end the month

Wheat

  • The MGEx wheat market continues to feel the pressure as harvest accelerates going into a holiday weekend. Nearly every yield reported is much “better than expected” with some areas seeing record or near record yields.

  • Export sales estimate: 300 to 600tmt.

  • Export business remains mostly routine with Japan tendering for US and Canada. Tunisia tenders for 100tmt optional origin.

  • KWU hovers around $4.00 and is a 28 cent discount to KWZ. Will KWZ weaken to KWU levels after expiration?

  • Deliveries: 275 KC HRW, No Chicago SRW, 1141 contract MGEx.

  • Stats Canada will release an updated production estimate this morning. Estimate is 26.2mmt vs 31.7mmt last year.

Outlook: Trading lower MGEx, steady/better KC and Chicago…