Morning Wire


Highlights

  • Back from Labor Day holiday and tensions remain high with North Korea, plus the path of Hurricane Irma seems to likely factor into a wetter southeast US. The current track this a.m. is heading between Cuba and Southern Florida.  The majority of the Midwest should remain dry this week, with cooler temperatures prevailing.
  • Dec17 cotton gapped higher overnight, as recent excess moisture and potential of more to come across the south will likely keep traders on edge this week.
  • Texas ports of Houston and Galveston should be up and running this week.
  • The US dollar index is -.004 @ 92.599, crude oil futures +.60 @ $47.89, DOW index futures are -60 @ 21,920.

Corn 

  • Friday’s CFTC report shows speculative funds net short 109,000 [previous week -82,000]. The index fund net long was down slightly to 323,000 contracts.
  • Various private forecasts were out late last week estimating US corn yields from 166.7 to 169.2 bpa.  USDA’s Aug forecast was using 169.5 bpa.
  • Vietnam lifted their ban on DDG imports that was in place since last December.
  • EPA will allow a shift to winter blends two weeks early.
  • August corn exports from Brazil and Argentina set a new record of 8.5 mil tons. The previous high was in Aug 2016 of 7.2 mil tons.

 

Outlook: corn is still trying to hold on to the gains from last week. Farmer selling dried up on the price break.  For the second year in a row, many feel the ‘lows’ were etched in stone the final week of August. Calls: +.03 to start

Oilseeds

  • Friday’s CFTC report shows speculative funds net short 66,000 [previous week -56,000]. The index fund net long remained steady at 117,000 contracts.
  • Various private forecasts last week estimated US bean yields from 47.1 to 49.8 bpa.  USDA’s Aug estimate was 49.4 bpa. The trade expects bean ratings to drop 1% in this afternoon’s report.
  • Dec17 Bean oil had its highest close [$35.67] since last Dec 2016.

Outlook: SX17 closed Friday back above the 20 day moving avg [9.43], as momentum is quietly turning back to the upside. The bulls remain hitched to hopeful China demand for OND that the US should be competitive with Brazil on prices. The market saw steady daily sales announced last week, and this could manifest again this week.  Calls: up .10-.11 cents

 Wheat

  • Friday’s CFTC report shows Chicago SRW speculative funds net short 100,000 [previous week -96,000]. KC HRW spec funds long 13,400 [previous week +26,000]. The Chicago index long was down slightly to 132,000 contracts, with KC index net long steady at 46,000 contracts.
  • Trade expecting spring wheat harvest to be 90%+ complete in today’s harvest progress report. Tail end of harvest yields were said to be coming in better than expected, but protein levels are trending lower now.
  • IKAR last week raised Russian wheat production estimates to 81-83 mil ton range. UkrAgroConsult raised its Ukraine wheat production estimate to 26 mil tons, up 1 mil from last month.

 

Outlook:  Chi Sept futures saw no deliveries last week, while Minn Sept had everything thrown at it. WZ had its first close since early July above its 10 day moving avg [4.33] on Friday. Commercials have ultra-wide carries and folks will shift to fall crop harvests and forget about wheat for a while. The spec funds are leaning modestly short in Chicago positions, so some short-covering could surface. There was also talk of extra N. Africa bound vessels waiting in the gulf for HRW loading this week. Calls: 5-6 better