Ag Market View July 27th
Soybeans traded higher but in a wide range. Open Interest remains near season lows. Early gains were linked in part to talk that China bought soybean futures in front of buying US new crop soybeans. A 10 day drier than normal US Midwest forecast also offered support. Noon 11-14 day maps actually went cold and wet for much of the upper US Midwest. This quite the change from 99 in Marshall, MN and Omaha, NE and 100 in Sioux Falls tomorrow. SU is now near 13.67 with range 13.64 to 13.92. SU has found support near 13.50 but needs to trade over 14.31 to turn market into a bull rally instead of a correction in a bear market. One crop watcher est US soybean yield near 50.0 vs USDA 50.8. Same group est Brazil and Argentina combined soybean crop near 179 mmt vs USDA 185 and 177 last year. Key will be China demand for US soybeans.
Corn futures ended almost unchanged in a wide trading range. CU ended near 5.48. Range was 5.44 to 5.64. Open Interest remains near season lows on a slowdown in new US export demand, fact domestic users have coverage and US farmer is not selling. Corn futures also could see some pressure if weekly
US corn export sales are low. There is talk that China may have bought 1.5-2.0 mmt of US Dec-Feb corn. There is some talk that Managed money funds are bearish corn futures. They feel that a majority of the US corn crop is pollinated and can no longer be hurt by bad weather. They also feel that despite talk China bought 1.5-20 mmt US Dec-Feb corn new sales are running behind pace to reach export goal. This also despite fact US weekly corn rating dropped last week with continued lower ratings in key states of IA, MN , SD and ND. Still talk of record yield in WI, IL, MI, IN, OH, KY and TN could offset the lower yields in the NW Midwest. One crop watcher est US corn yield near 175.5 vs USDA 179.5 Most feel funds are trading the 179.5 until proven different. Same group est Brazil and Argentina combined corn crop near 134 mmt vs USDA 141 and 153 last year. CU has found support near 5.40 but needs to trade over 5.79 and fill the 5.88 gap to turn market into a bull rally instead of a correction in a bear market.
Wheat futures traded mixed in wide ranges. USDA dropped weekly US spring wheat crop rating to only 9 pct G/E vs 70 last year. Some ND farmers were asking where is the 9 pct? Initial spring wheat tour wheat yields in SE ND are better than expected. Russia spring areas remain dry with est of crop now near 80 mmt vs USDA 85. Canada crop could be 21 vs USDA 31. WU ended near 6.74. Range was 6.71 to 6.90. Open interest remains near season lows. KWU ended near 6.42. Range was 6.35-6.55. Open interest has been going up since the season low on June 29 low. USDA est that 84 pct of the US winter wheat crop was harvested. MWU ended near 8.78. Range was 8.75 to 8.97. Fact US exports are running behind last year and pace to reach USDA goal offers resistance to wheat futures. Egypt bought Ukraine and Romanian wheat in their tender. Like corn, MWU will need to trade over 9.09, 9.17 and then 9.44 to turn market into a bull rally.
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