Overnight news continues to be China based. Both sides continue to chirp on if there will be future meetings or not. China did tip a card about domestic prices though. The Ag ministry announced that it will release cold stored meats (pork, beef, mutton and chicken) to help quell domestic food inflation and the sharp rise in pork prices. No amounts were mentioned and it’s a state secret in terms of how much meat supply that China has in the freezer. However, ASF has had a significant impact on China’s pork production and domestic shortages are becoming more widespread. Corn prices are high in China as well, as are cotton although to a lesser degree. It will be interesting to see what they do there.
USDA export sales were the best we have seen in weeks for corn, coming in at 860KMT well above where they have been since the summer run up started. This does not even include Japanese purchases that are expected from the trade deal. Soybean sales were poor, coming in near 450KMT for both years combined, China was a buyer. Wheat sales continue to be stout, coming in at 670KMT which is a fantastic sign given price discounts. Cotton export sales were subpar at 150K round bales.
No forecast changes have been observed. The center/western part of the growing belt looks to get rain in the coming week. A drier pattern will be established elsewhere through the next 10 days. Midwest temps will remain cooler than average into mid-September. The rush to maturity will be slowed by this pattern. West Texas will be hot and dry for the coming week, no rain is forecast. A hurricane is bearing down on Florida, it will make its way to the panhandle but shouldn’t bring anything more than moisture and some wind. It will be interesting to see if the hurricane changes any weather patterns into late Sep. I think algo’s are going to be hyper sensitive to cool weather as the longer run models come out in early September.
The following graphic is being floated around online. I wish I could credit to whoever sent it out, it was forwarded to me by multiple people. I just spoke to a guy in Central Illinois here is where he is on what he says is a pretty good looking crop.
Corn planted on April 25th will hit black layer (R6) Sep 6.
Corn planted on May 18th will black layer around Sep 21.
His late planted stuff, going in on June 3 won’t hit R6 until mid Oct.
He wasn’t sure on the date yet because it’s so early. He said that even them the late planted corn can’t be shelled because it will still be at 30-35% moisture. He would prefer to harvest at 20-25% but he said the later it gets, the harder it will be to pull that moisture down. This is going to the problem you hear a lot about as we get later in the season, if it would stay below average.
Bottom line, the corn crop still has some risk to yield outside of an early killing frost. Corn prices hit the Dec monthly Bollinger band yesterday. I expect Dec futures to be very well supported in the near term, in the mid 360’s. The obvious target would be the gap at the 390 level, but I don’t think I would wait that long for corn that needs to be priced by November. I would be starting at 380.
Subscribe to This Week In Grain
This Week In Grain - This Week in Grain (T.W.I.G.) is a weekly grain and oilseed commentary newsletter designed to keep grain market participants on the cutting edge, so they can hedge or speculate with more confidence and precision.
The StoneX Group Inc. group of companies provides financial services worldwide through its subsidiaries, including physical commodities, securities, exchange-traded and over-the-counter derivatives, risk management, global payments and foreign exchange products in accordance with applicable law in the jurisdictions where services are provided. References to over-the-counter (“OTC”) products or swaps are made on behalf of StoneX Markets LLC (“SXM”), a member of the National Futures Association (“NFA”) and provisionally registered with the U.S. Commodity Futures Trading Commission (“CFTC”) as a swap dealer. SXM’s products are designed only for individuals or firms who qualify under CFTC rules as an ‘Eligible Contract Participant’ (“ECP”) and who have been accepted as customers of SXM. StoneX Financial Inc. (“SFI”) is a member of FINRA/NFA/SIPC and registered with the MSRB. SFI does business as Daniels Trading/Top Third/Futures Online. SFI is registered with the U.S. Securities and Exchange Commission (“SEC”) as a Broker-Dealer and with the CFTC as a Futures Commission Merchant and Commodity Trading Adviser. References to securities trading are made on behalf of the BD Division of SFI and are intended only for an audience of institutional clients as defined by FINRA Rule 4512(c). References to exchange-traded futures and options are made on behalf of the FCM Division of SFI.
Trading swaps and over-the-counter derivatives, exchange-traded derivatives and options and securities involves substantial risk and is not suitable for all investors. The information herein is not a recommendation to trade nor investment research or an offer to buy or sell any derivative or security. It does not take into account your particular investment objectives, financial situation or needs and does not create a binding obligation on any of the StoneX group of companies to enter into any transaction with you. You are advised to perform an independent investigation of any transaction to determine whether any transaction is suitable for you. No part of this material may be copied, photocopied or duplicated in any form by any means or redistributed without the prior written consent of StoneX Group Inc.