- Both Crude Oil and Dow Jones nearby futures held just above their 100 day moving averages in yesterday’s sell-off, a risk-off day driven by OPEC’s production increase decision, and concern of an economic slowdown due to the resurgence of Covid-19 cases.
- The interest rate on 10 year Treasury Notes dropped to 1.19% yesterday, down 12 basis points and the lowest level since February.
- Weather forecasts continue to show above normal temperatures and below normal precipitation for much of the country the next two weeks.
- August grain options expire this Friday, July 23rd.
- Outside markets as of 7:00 am CT: Dollar up .047 at 92.938, Crude Oil up $.24 at $66.66, Dow futures up 235 at 34074, and Gold up $9.80 at $1819.00.
- Illinois corn was rated 65% G/E, recovering the 5 points it lost in the previous week.
- There were 1.0mmt of corn inspected for export last week, 459.6tmt of which was to China.
- Another frost event was reported to have occurred in southern Brazil. Agrural estimated 30% of the Safrinha corn crop has been harvested in the center south region.
Outlook: Stabilizing outside markets have allowed corn to react to bullish weather forecasts, with prices near Sunday night’s highs.
- Soybeans were rated 60% G/E, up 1 from last week and in line with expectations.
- Nearby contracts in the soybean complex, soybeans, soymeal and soyoil, formed key reversals lower in yesterday’s trade.
- China imported 10.48mmt of soybeans from Brazil in June, just below the record high of 10.51mmt a year ago and 14% higher than in May. They only imported 54.8tmt from the U.S. last month.
- Argentina’s senate passed a measure that would reduce soyoil-based biodiesel use from 10% to 5%, possibly down to 3%, in domestic diesel fuel use. The legislation is expected to be signed into law by month end.
Outlook: The soybean complex bounced higher overnight, but so far are just trading inside yesterday’s price range.
- Spring Wheat is rated 11% G/E, down 5 from last week; and 63% Poor/Very Poor, which was up 8 points from last week. Washington state has zero Spring wheat rated in the Good or Excellent categories. Percent Harvested of Spring Wheat is expected to be reported next week.
- The Winter Wheat harvest is 73% complete, up 14 points from last week and 1 below average.
- Kazakhstan reportedly plans to limit feed wheat exports and ban rye exports for 6 months, beginning August 15th, due to drought conditions there.
Outlook: KC and Chicago wheat made 2 month highs in the overnight session, while MPLS approached contract highs again, reacting to the decline in Spring wheat conditions.