Morning Commentary 8/16/21

Pro Farmer Crop Tour Starts Today in OH & SD; NOPA July Crush Data Due at 11 AM CT; China Cash Soymeal Prices Rise on Demand

6:30 CT CBT Prices: Nov soybeans are up 4.00 cents at $13.69, Dec corn is down .50 of a cent at $5.725 with Sept Chi wheat up 6.00 cents at $7.6825.

AgResource Morning Grain/Soy Comment & AnalysisGood Morning! It has been a mixed overnight trading session in active volume. Soy futures paced the rally on active Chinese soymeal volume while corn futures were mixed as the impact of Central US weather starts to seasonally fade. Wheat is reacting to the upside on the rise in Paris futures. NOPA will be out with its July crush data at 11 AM CT which is expected to reflect an 8% decline from last week.

ARC Research looks for a mixed trading session as the Pro Farmer Crop Tour gets underway and traders await this afternoon’s NASS weekly crop condition report. US corn/soybean conditions are expected to hold steady or decline slightly. Traders are looking for the net change in conditions since the opening days of August to gauge what the September NASS Crop Report will say?

Two legs of the Pro Farmer Crop Tour will start today with one starting in Sioux Falls, South Dakota and the other in Columbus, Ohio. Both legs will push to a completion in Rochester, Minnesota on Thursday evening. The PF Tour will tour some the best areas of the Midwest and its expected high or record high yields will be reported in corn with high soybean pod counts. The Tour will release their final crop yields on Friday.

CBT open interest gained 10,751 contracts in soybeans and 3,763 contracts in Chi wheat, while declining 10,052 contracts in corn. The Chinese pricing of soybeans is evident in CBT open interest while funds are boosting their net long wheat position. Corn futures lack speculative interest following WASDE.

NOPA will be out at 11 AM CT with a crush estimate of around 159-160 Mil Bu with soyoil stocks pegged around 1,500 Mil pounds. If the July crush was 159 Mil Bu, it would be off 8% from last year and help in confirming the weaker WASDE 2020/21 crush estimate. US crushers continue to pay high premiums for old crop soybeans amid historically tight supplies.

Malaysian September palmoil futures closed 53 ringgits higher at 4,663 RM/MT. Paris September wheat is up €3.75 at €258.25/MT. Strong resistance is noted above €260/MT. Dalian Sept corn rallied $.02 to $10.30/Bu while September soymeal rallied $11.75/MT to $565.00. The strong rally in domestic soymeal prices is based on tightening cash supplies due to slowing soybean imports and strong demand from hog producers.

China is showing interest for US soybeans for October/November shipment with additional daily sales expected to be announced by USDA. Algeria is seeking world wheat and likely will secure French origin. Other demand is routine with US corn starting to become competitively priced against South American offers.

There just isn’t much fresh news available. The CBT will closely follow the Pro Farmer Crop Tour as it tries to validate NASS August crop estimate. ARC looks for a 2-sided CBT trade with rain needed across the Plains and the W Midwest. Sharp breaks will uncover end user pricing below $5.60 December corn and $13.50 November soybeans. Importers and end users see no reason to chase rallies with the Southern US soy/corn harvest to start in early September.

North American Weather Pattern Discussion: The GFS/EU weather models are fair agreement as tropical storm Fred looks to make landfall across the Florida Panhandle later today with heavy rain and a slow progression into W Tennessee by Wednesday. The SE US will see soaking rains from Fred with totals ranging from 2-3.50”. Fred will act to block the North American weather pattern with limited Central US rainfall into the weekend. N and C Plains rain chances start to increase on late Saturday/Sunday. Central US temps moderate late week following a few warm/hot days early this week with highs in the mid 80s/mid 90s

The 10-day rainfall graphic is from the GFS forecast model. A generally dry Central US weather pattern will prevail for the next 5-6 days with improved rains in the 7-12 day period. The rains are expected to be focused on the N Plains and the NW Midwest from the Dakotas into Iowa where they are desperately needed.

The forecast models are struggling with the extended range forecast with 3 tropical systems noted in the Gulf or Atlantic. Tropical depression Grace is approaching the Dominican Republic and must be closely followed thereafter with a Gulf entry forecast for Thursday. Cooling across the Western US forecast.

Improved Rainfall Chances for the N Plains and W Midwest Starting on Sunday: 

Not Nearly as Warm as Prior Weeks as Cooler Air Filter Southward Across Canada: 

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