Jim Warren

Aug 5, 2020

  Jim Warren

Highlights 

  • Gold and silver are making new highs this morning as the U.S. Dollar Index is weaker and approaching last week’s lows.  Crude Oil is trading at its highest level since March 6th.
  • NOAA’s 6-10 day outlook projects above normal temperatures returning to the cornbelt, but also above normal precipitation for all but the Plains states.
  • Trade representatives from the U.S. and China will video conference August 15th to assess the progress of the Phase 1 deal.
  • Outside markets as of 7:00 am CT: Dollar down 482 at 92.900, Crude Oil up $1.58 at $43.28, Dow up 206 at 26923 and Gold up $36.00 at $2037.20. 

Corn

  • Ukraine’s UGA raised the estimate of their corn crop 2.1mmt to 38.9mmt.  USDA currently has them estimated at 39mmt.
  • Agroconsult is projecting that Brazil’s total corn crop next year could reach a record 110.3mmt as crop area is expected to increase.
  • Texas reports that sorghum harvest is 35% complete there, 6 points behind the average pace but progressing rapidly. 

Outlook: Corn made new contract lows in yesterday’s trade, as did also the CUCZ spread, in response to good conditions and increasing production ideas.  The August USDA report a week from today is expected to show an increase in yield.  Open interest increased 24k on the break, indicating new sellers entering the market.

Oilseeds

  • Brazil is projected to increase their soybean area by 1 million hectares in the coming season, which could result in a record 132.6mmt of production, according to Agroconsult.
  • Soybeans on China’s Dalian futures were down 53 cents/bu last night.
  • There were 0 deliveries in August soybeans, 219 in soymeal and 142 in soyoil. 

Outlook: Increasing yield prospects weighed on the bean market yesterday.  USDA has raised bean yields on the August report 3 out of the last 4 years, the remainder was unchanged.

Wheat

  • A massive explosion in Lebanon’s Port of Beirut yesterday is reported by their economy minister to have made wheat reserves there unusable, therefore they will need to start importing replacement supplies.  Seven employees at the granaries remain missing.
  •  Romania’s wheat crop was estimated to be about 5.5-5.6mmt by their Ag Minister, that would be over 40% smaller than last year’s crop.
  • France’s farm ministry reduced its soft wheat production estimate by 1.6mmt to 29.7mmt.
  • Egypt’s GASC is tendering for wheat from various origins for September shipment.  Results should be out later today.
  • Jordan tendered for 120tmt milling wheat, optional origin, the tender closes August 12th. 

Outlook: Both KC and MN wheat made new contract lows in yesterday’s trade but have made small recoveries overnight.