Over night price action was dominated by action in the crude oil markets thanks to the OPEC meeting that is taking place this week. So far headlines have been bearish with no production cuts being seen before the meeting ends.
The overnight CBOT trade has been slightly higher following Monday’s decline. The harvest is picking up across the Midwest with producers moving into the corn and soybean fields at an equal rate. Pace is slightly behind schedule but only slightly so. US corn yields remain good but below 2014 levels in many cases. On the other hand, soybean yields have been record which has many traders discussing a further increase to USDA’s September soybean yield estimate. The satellites are confirming this in my opinion. USDA reported that 10% of the US soybean crop and 15% of the US corn crop is harvested with 30% of the US winter wheat crop being seeded. All are right around to averages. It’s expected that a big push will be made in the harvest of summer row crops this week as fields dry down. US corn and soybean crop condition ratings held steady at 74% GD/EX in corn and 73% GD/EX in soybeans.
Cotton weather appears to be improving, we should see a week of drier weather going forward. Global economic uncertainty is my main concern, as any bearish news could tilt this market pretty quickly as the funds are set up very long. I look for perception of supply to increase over coming weeks. Cotton is a sell in the 70’s for 2016 and 2017 contracts in my opinion.
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