Joe Lardy

Jul 30, 2020

Highlights

  • The weather forecast for the next ten days has spotty showers with below normal temps.
  • The Fed latest policy decision left rates steady at a near zero level. The Fed also pledged to maintain stimulus measures.
  • With seven months complete in the year to measure Chinese phase 1 purchases, imports are behind 2017 levels instead of the 50% higher as needed to meet the target.
  • Russia says it plans to register a coronavirus vaccine as soon as August 10, which could be the world’s first officially approved vaccine.
  • The energy markets are weaker with crude oil down 76 cents at 40.51/barrel.
  • US$ is up .092 at 93.545 and gold is down $6 at 1947.

Corn

  • The overnight trade has futures on either side of unchanged heading into the morning break.
  • Ethanol production was surprisingly higher. Production was up 50,000 bpd to 958,000 bpd. Production is now back to pre-covid levels we last saw in September.  
  • China held another reserve auction of corn and sold 100% of it.  They sold just over 4 million tons at a price around $7.40/bushel. This is the highest priced auction yet.   
  • A USDA rep in Argentina predicts corn production at 47.6 million tonnes compared to the WASDE estimate at 50 million tons.
  • According to Brazilian consultancy Datagro, next year’s corn crop could reach 112.13 million tons up 8% from last season.
  • Export sales for new crop corn were 638,700 compared to estimates of 400,000-1,000,000 metric tonnes.
  • Spreads: U/Z 10.50 carry, Z/H 11.75 carry, Z/N 25.25 carry, Z/Z 35.75 carry.

 

Outlook:  The corn markets are hovering around unchanged without much market moving news this morning.

 

 

Oilseeds      

  • The bean market continues to show weakness with futures down 4 cents this morning.
  • According to Brazilian consultancy Datagro, next year’s soybean crop could reach 131.69 million tons up 6% from last season.
  • Export sales for new crop beans were gigantic at 3,344,200 compared to estimates of 1,500,000-2,000,000 metric tonnes.
  • Palm oil was up 33 ringgits overnight.
  • Spreads: X/F 6.25 carry, X/H 4.5 carry, X/N 15 carry, X/X 8 carry.

     

    Outlook:  Beans have been weaker in the overnight but the huge export sales total has the chance to push beans higher.       

     

     

    Wheat

  • The wheat market is leading the way lower with futures down 6 cents overnight.
  • A USDA rep in Argentina predicts wheat production at 20 million tonnes compared to the WASDE estimate at 21 million tons.
  • Export sales were 676,600 compared to estimates of 250,000-650,000 metric tonnes.
  • Spreads: Mpls U/Z 14 carry and Kansas City U/Z 10 carry.

 

Outlook: The wheat markets are softer as December futures remain rangebound between 530 and 540.