Joe Lardy

Jul 29, 2020

 

 

Highlights

  • The weather focus is shifting away from corn and on to soybeans.  Corn is made in July, and beans are made in August.
  • The Fed latest policy decision will come out later today. It is expected that rates will be kept near zero.  Yesterday the Fed extended its emergency lending programs through the end of 2020.
  • 6 states saw record COVID-19 deaths.
  • The energy markets are a little stronger with crude oil up 39 cents at 41.43/barrel after a surprise drop in crude inventories.
  • US$ is down .067 at 93.629 and gold is up $6 at 1951.

 

Corn

  • The overnight trade has futures on either side of unchanged heading into the morning break.
  • Ethanol data comes out this morning at 9:30 central. It is possible to see a slight increase, but a massive jump is doubtful due to the big reduction in overall gasoline demand.
  • The Dalian exchange said it will adjust the trading limit on corn futures to 6% from the settlement on July 31st
  • The corn harvest in Brazil is slower than last year.  Parana is 26% done but Mato Grosso is 87% complete and despite lagging last year is well above average.
  • Spreads: U/Z 10.25 carry, Z/H 11.5 carry, Z/N 24.5 carry, Z/Z 33 carry.

 

Outlook:  The corn market feels a little soft with decent weather and lack of bullish inputs.

 

 

Oilseeds      

  • The bean market has stabilized in overnight trade with markets hovering near unchanged this morning.
  • The soybean market had seen 10 straight days of flash sale announcements in the morning before being shut out yesterday.
  • Palm oil was down for a second consecutive session showing losses of 2.4% to 2608 ringgits.
  • Rabobank expects Brazilian soy acreage to be up 3% next year but production is expected to increase 5.3%.    
  • Spreads: X/F 6 carry, X/H 3.5 carry, X/N 12.5 carry, X/X 4.75 carry.

     

    Outlook:  Weaker to start as beans are entering the break on the low of the session. The bean market needs to see more export demand.       

     

     

    Wheat

  • The wheat market has bounce back in overnight trade with futures up 6 cents regaining some of yesterday’s losses.
  • Jordan received only one offer in its latest wheat tender and ended up cancelling the tender.
  • Australia’s wheat areas have received good rains, so the country is forecasting production at 26.7 million tonnes which is 75% higher than last year’s crop.
  • Russia’s Sovecon is pegging the Russian wheat crop at 79.3 million tons. Last year’s crop was 73.6 million tons.
  • Spreads: Mpls U/Z 14 carry and Kansas City U/Z 10 carry.

 

Outlook: The wheat markets are trying to recapture some of yesterday’s losses, but the weakness in the row crops could slow that momentum.