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Archive for the ‘Grain Comments’ Category

Market Report

Wednesday August 15th, 2018

September corn closed down ¾ at $3.61 ½ and December closed down ½ at $3.76.  November beans closed down 10 ¾ at $8.69 and January 19 closed down 10 ¾ at $8.81. September wheat closed down 9 ½ at $5.32 ¼ and July 19 closed down 8 ¾ at $5.78 ¾. Crude oil closed down $1.87 at $64.46.

The corn market featured back-and-forth trade today, ultimately finishing fractionally lower. Not a bad performance overall, given a broader “sell commodity” bias that negatively impacted many related markets. Managed Money funds were believed net buyers of 5,000 corn today, which would leave them net short 65,000 combined futures and options. The start of a cooler and wetter stretch of U.S. Midwest weather was likely behind much of the early weakness in the markets. At this point, the benefit to corn is fairly limited, with over one-quarter of the crop dented, but more immature crops will see better kernel fill under better weather conditions. Key dry areas in Eastern North Dakota could be left wanting for rain.  Private crop tours will fire up next week and no doubt twitter feeds will be scoured for comments given the uncertainty surrounding yield potential in such a rapid maturing crop.

The weekly EIA report today was more mixed for ethanol, coming on the heels of the prior week’s solidly bearish data.  Production backtracked 2.6% this week to a 1.072 mil bbl/day rate, which is still among the strongest levels recorded. Elsewhere, macro markets were a negative input today. The US Dollar continues to hang near one year highs, while Crude Oil pushed to new six week lows. USDA disclosed a small private corn sale today to “unknown” 55k mt for 17/18 year, almost 60k for 18/19. Export sales tomorrow should stay on a familiar trajectory

The soybean market set back on weather selling today as a more active rainfall pattern sets up for the coming week. While the benefit to the early corn crop at this stage is supportive it probably isn’t a game changer for yields. On the other hand, this pattern of non-threatening temps with good rains is likely to be a big help to bean yields and as a result beans and meal gave back most of yesterday’s gains. Trade volumes continue to shrink with Nov bean futures trading 81k contracts compared to Friday’s high volume flush on 183k.

Yesterday the talk of the market was China buying Argentine meal for Sept/Oct. Today the wires are reporting that China bought 10 cargoes of Brazilian beans and 15 cargoes last week. Chinese crush margins are $20/mt in the black despite the big premiums paid. It was noted that the buying overall is subdued and normally they would be taking 25 cargoes/week but that is likely due to a build-up of supply from their aggressive earlier buying posture.

The early overnight gains were not very lasting, with prices trading slightly weaker most of the night. The European wheat market opened and stayed slightly lower throughout the morning which added to some of the negative tone, and with the lack of any positive fundamental news around the market place today, and with the US Dollar into new contract highs again. It did not take too long into the day session to find that out, with prices hitting double digits lower within the opening hour. Things did not improve much over the course of the day, with trade mostly staying within a $.07-$.12 lower trading range.

Anna Kaverman

Market Report

Tuesday August 14th, 2018

September corn closed up 5 ¾ at $3.62 ¼ and December closed up 6 at $3.76 ½. November beans closed up 11 at $8.79 ¾ and January 19 closed up 11 at $8.91 ¾. September wheat closed up 8 ¼ at $5.41 ¾ and July 19 closed up 6 ¼ at $5.87 ½. Crude oil closed down $.24 at $66.33.

“Turnaround Tuesday” across the grain room today as corn finished higher, erasing over half of the USDA report day deficit. Managed Money traders were net buyers of 10,000 corn today, and will head into tonight net short 70,000 combined futures and options.  As has often been the case, today’s rally started overseas.  Argentina announced overnight that it was temporarily suspending new export registrations. This was in response to active buying over the past several days and represents the latest major ag exporter to flinch amid uncertainty over world crop production and trade flows.

One more day of hot and dry weather and rising levels of crop stress occurred today in the Eastern Belt before more favorable conditions move in mid-week. One to two week outlook maps have been trending in a cooler and wetter direction. Unfortunately, this may be “too little, too late” for some of the more advanced crops. Last night’s condition reports found 73% of the corn in the “dough” stage and 26% in the “dent” stage, well ahead of normal and the prior year. They have also found some rather serious deterioration in recent reports, particularly in the state-by-state’s. Illinois (off -5% G-E) and the Dakotas (ND down -6% G-E, SD off 3%) were the important ones in the latest update. In many ways, the 2018 growing season is the near spiritual opposite of 2017 (which featured stress early/mid season but ideal finishing weather).

Technically, today’s rally puts corn right on the cusp of the new initial resistance level in the $3.75-$3.80 CZ neighborhood.  Keeping the bull mojo flowing would leave behind Monday’s low ($3.65 CZ) as important support looking forward, and might allow the market another look at recent highs near $3.85.

The soybean market built on yesterday’s reversal trade with a strong rally effort that was driven by gains in soybean meal.  Talk is that China came in and bought a package of Argentine meal for Aug/Sept. The news wires this morning were reporting Argentina halted its scheduled incremental reduction in export taxes for meal and oil for the next 6 months. Argentina has also closed export registrations for the next three days and are suddenly showing signs of tightness due to a production shortfall. With product export duties holding steady while soybeans export duties continue to be reduced by .5%/month it in effect reduces crush margin and incentive.

Argentina’s soybean crop fell to 37 mmt from 55 mmt last year and they require imports in order to meet their meal commitments which have grown due to China’s aversion to US beans that are penalized with a 25% tariff. There were 33 tmt of US beans shipped to Argentina out of the SE in yesterday’s inspections data which takes Argentine purchases to 890 tmt to date (100 old and 790 new crop) and that is before you uncover and account for unknown sales. US meal exports were record large in July.

Uncertainty surrounding China’s status as our biggest buyer going forward limits the upside potential in beans. Supply side realities will also limit the upside potential of beans as the US crop has the potential to be a monster. Bean yields are largely made in Aug/early Sept. and the forecast is ideal for almost everybody, with conditions in ND rapidly deteriorating due to dryness and heat. The maps show plenty of moisture on the way and non-stressful temps which is a perfect scenario for yields. Big premiums for Brazilian beans have growers in that country looking to expand soybean acreage while if the US-China situation remains unresolved you should see producers respond to lower prices with a significant shift in acreage out of soybeans.

Markets firmed late in the session and would finish the day with some positive enthusiasm. Offers in the GASC tender did not do the markets any favors as there were plenty of Russian and Romanian offers and at offers $3.00-$5.00 lower than a few weeks ago. There were no US offers, and even though none were expected, the fact that there were so many other offers diminishes hope, at least for the time being that the wheat export programs in those countries might be letting up soon.

As we moved into the day session, the strength in soy (mostly meal) seemed to have a ripple down effect across the rest of the grain complex. Corn found it first, and that combination may have been enough to tug wheat higher. Spring wheat conditions coming in better than expected kept Mpls wheat prices lower throughout most of the morning, but all three classes of wheat would rally over the latter half of the day.

Anna Kaverman


CORN – WOW!  The government never ceases to amaze me.  The monthly crop report was a bearish surprise for the market when the US average 2018/2019 corn yield jumped from 174 BPA to a record 178.4 BPA!  The average guess had been 176.2 BPA.  The USDA used the third highest implied ear weights and record ear counts for their yield forecast.  Post-report chatter wondered if this will be the highest yield estimate of the year.  Production rose to the third highest ever at 14.586 billion bushels, up 356 million bushels from last month and well above the 14.416-billion-bushel estimate.  Other changes on the 18/19 balance sheet included a 100 million increase in feed use, no change to ethanol, and an increase of 125 million in exports to 2.35 billion bushels.  Ending stocks were raised 132 million bushels to 1.684 billion bushels, down 343 million year on year, but were slightly higher than the pre-report estimate of 1.636 million bushels.  There were no changes on the 2017/2018 US corn balance sheet, leaving carryout at 2.027 billion bushels. The trade was expecting a drop to 2.016 billion bushels.  The market was down 11 – 11 ½ cents on Friday because of the crop report numbers.

World carryout numbers for 2018/2019 were up 3.5 mmt from last month at 155.5 mmt and versus the estimate for 152.6 mmt.  Brazil’s 18/19 corn crop was reduced 1.5 mmt to 94.5 mmt and the European Union’s corn production was lowered 1.7 mmt to 59.8 mmt.  The FSU was raised 1.2 mmt to 47.7 mmt and, despite questionable weather, Ukraine’s corn was increased 1 mmt to 31 mmt.  Will we see reductions in world corn production on subsequent reports?  Don’t be surprised if you do.

December corn consolidated in the $3.80’s in the week ahead of the August 10th WASDE report, but pushed to new lows for the month in post-report trading. Weather forecasts were uninspiring with heat returning to the Midwest, but scattered rains helped limit the impact.  The crop is pushing to maturity faster than usual.  As of July 5th, corn conditions were down 1% to 71% good/excellent.  57% of the crop was in the dough stage versus 37% on average; 12% dented versus 6% average; 96% silking versus 92% on average.

Weekly export sales were very good for old crop and decent for new crop.  Old crop sales were 21.8 million bushels, bringing total commitments to 2.36 billion bushels.  The USDA is forecasting 2.4 billion in exports this year.  New crop sales were 35.9 million bushels.  Total new crop sales are 317.6 million bushels versus 199.5 million last year.  The new export forecast for new crop is 2.35 billion bushels.   Weekly ethanol production was up 36,000 bpd to 1.1 million bpd, the second highest monthly production ever.  Stocks were up 40 million gallons to 963 million gallons.

The US and Mexico are getting closer to a NAFTA deal.  Once they come to an understanding, Canada will likely be brought to the table.  They hope to have something in place by the end of the month. The WASDE report showed the all wheat crop at 1.877 billion bushels, down 4 million bushels from last month, but 27 million bushels higher than the trade estimate.

OUTLOOK:  Questions may linger over the accuracy of the new US corn yield number, but that’s what we’ll have to use for now.  Historically, the US corn yield from August to the final has gone up in 4 out of the last 5 years.  However, the US still has the cheapest corn in the world and demand has been decent.  Old crop bushels were sold by the grower this week and the market absorbed them fairly well.  We may have further downside in corn, but believe it could be limited as end users look for a bargain and the yield number is viewed with some skepticism.  How much lower soybeans go may have a negative impact on corn.  There has been increased interest in the December 2019 and 2020 corn contracts.  With current price ratios and no end in sight to the trade war, how many acres will switch back to corn next spring?  December 2019 corn closed the week down 10 ¼ cents at $4.00 ½ and the 2020 contract was down 5 ½ cents at $4.15 ¼ per bushel.  The September 2018 corn contract fell 12 cents this week to $3.57 ¾ and the December 2018 corn was 12 ½ cents lower at $3.71 ¾ per bushel.

SOYBEANS – November soybeans eased higher into the WASDE report despite more tariffs added against additional Chinese imports.  China’s new retaliatory 25% tariff on $16 billion on US goods didn’t include anything new for soybeans, but it drives home the fact that we’re not getting any closer to settling the trade war.  The new tariffs on both sides go into effect August 23rd.  The relatively quiet trade for the week was shot out of the water with the bearish August 10th WASDE report.   The USDA jumped the 2018/2019 US bean yield 3.1 BPA to 51.6 BPA, just 0.40 BPA under the record!  In 4 out of the last 5 years, the bean yield has increased from the August to the final crop report. The trade was anticipating a 49.8 BPA yield.  Record production of 4.586 billion bushels surpassed the average 4.425-billion-bushel estimate and was 276 million bushels higher than last month.  Other changes on the 2018/2019 balance sheet included a 15-million-bushel increase in crush and a 20 million bushel rise in exports, with both categories showing 2.060 billion bushels.  Year on year exports are only expected to fall 50 million bushels. The USDA didn’t figure in any US soybeans exports to China for 2018/2019.   If the trade war is extended, the export line could be expected to shrink.  Soybean ending stocks at a record 785 million bushels obliterated the 648-million-bushel trade forecast and was 205 million bushels higher than last month’s 580-million-bushel projection.  The 2017/2018 balance sheet raised crush 10 million and upped exports 25 million for a cut in ending stocks of 35 million bushels to 430 million bushels.  Pre-report estimates were looking for ending stocks of 463 million bushels.

Record world 2018/2019 ending stocks of 105.9 mmt were sharply higher than the 99.5 mmt expected.  Brazil’s 18/19 soybean production forecast was unchanged at 120.5 mmt and Argentina’s was unchanged at 57 mmt.  China’s imports were steady at 95 mmt.  Brazil’s soybean acreage could be expected to increase 3% – 5% next year on strong Chinese demand.

Oil World this week pondered that China will need to import up to 15 mmt of US soybeans between October and March.  This is when South American supplies will be tight to non-existent.  Earlier in the week, China’s July soybean imports were reported at 8 mmt, down nearly 8% from June and down over 20% from last year.  This led to a huge jump in Chinese prices.  For the calendar year, China has imported 52.9 mmt, down 3.7% from last year.  China is also considering allowing Argentine meal to be imported.  China continues to look for alternatives to replace US protein.  China expects to cut their soybean imports 10 mmt in 2018/2019, due to new meal technology and use of supplements.  The China Academy of Science said the use of low protein formula in animal feed could lower their annual meal demand by 5% – 7% or 5 mmt of soybeans.

Brazil’s freight situation hasn’t improved much.  The President signed a bill setting minimum truck freight rates.  The government will publish prices in January and July.  Higher freight costs have become a huge irritation for farmers and exporters.

Weekly export sales were above expectations for old crop at 15.5 million bushels.  This brings old crop sales to 2.151 billion bushels compared to the USDA forecast for 2.11 billion bushels.  The average rollover of old crop sales into new crop is 67 million bushels.  New crop sales were at the high end of estimates at 19.5 million bushels.  Total new crop sales are 400.7 million bushels, well above last year’s 258.4 million bushels.  The USDA’s updated new crop export sales projection is 2.06 billion bushels. As of July 5th, the US soybean crop was rated 67% good/excellent, down 3% for the week.  There was 92% of the crop blooming versus 86% on average and 75% setting pods versus just 58% on average.

OUTLOOK:  For the week, November soybeans plunged 40 ½ cents to $8.61 ¾ per bushel.  Going into the report, they had been higher on the week, but the 42 ¼ cent dive in post-report trading erased the gain.  November 2019 soybeans settled at $9.05 ½ per bushel, down 28 ½ cents per bushel for the week.  Until the trade war with China shows some sign of easing or unless August’s weather turns very hot and dry, it will be difficult to find a reason to stage a significant rally in soybeans.  August weather could hold some surprises, but it’s chancy to count on Mother Nature for a bail out.

In contrast, USDA projects 2018 U.S. all-wheat production slightly lower from its July estimates of 1.881 billion bushels, edging lower to 1.877 billion bushels. Spring wheat projections of 614 million bushels were unchanged month-over-month, while winter wheat production forecasts moved from 1.192 billion bushels to 1.189 billion bushels. Analysts were expecting a bigger reduction of wheat production estimates, with an average guess of 1.857 billion bushels. U.S. wheat ending stocks for 2018/19 also moved lower, from 985 million bushels a month ago to 935 million bushels. World ending stocks this marketing year also fell, from 260.9 MMT down to 259.0 MMT – but remain just 5% lower than record levels from a year ago.

The European Union is the primary culprit for lower worldwide supplies, which are down an estimated 7.5 MMT (275 million bushels) month-over-month. Total EU wheat production could land at 5.052 billion bushels, which would be the lowest total in six years. USDA raised its projected season-average price for wheat by 10 cents at the midpoint, with a range of $4.60 to $5.60.

There are three primary reasons wheat couldn’t find traction for a rally today. First, futures were weighed down by soybeans. Second, the surge in the value of the dollar tends to be bearish for wheat. Finally, charts at all three markets show a break below support lines from the July rally that tend to trigger more technical selling.

Anna Kaverman

Market Report

Thursday August 9th, 2018

September corn closed down 2 at $3.69 ¼ and December closed down 2 ¼ at $3.82 ¾. November beans closed down 6 ½ at $9.04 and January 19 closed down 6 ¼ at $9.15 ½. September wheat closed down 5 ½ at $5.64 ½ and July 19 closed down 5 at $6.04 ¼. Crude oil closed down $.11 at $66.14.

Thursday was a “Red Day” in the markets, corn pushed as much as $.05 lower on the day, though that break tended to find a few commercial buyers. In the end, corn would finish $.02 lower. Managed Money traders were viewed net sellers of about 10,000 contracts today, which would leave them net short an estimated 70,000 combined futures and options tonight.

With European markets “pausing to refresh”, U.S. markets also lost one of their primary drivers. Most of the news around today was not bearish, but buyers remain somewhat cautious, only willing to buy corn on weakness in front of tomorrow’s important USDA report. The parade of world production downgrades continued unabated overnight, mostly centered around European and FSU wheat. Not to be outdone, CONAB (Brazil’s USDA) trimmed second crop corn estimates once again. Full year corn estimates seen 82.2 MMT, which compares to 82.9 mmt in prior estimates and 97.8 mmt last year.  No surprises here, and we would expect the USDA to do similar “damage” tomorrow.

Weekly USDA Export sales report was pretty good for corn. Old crop sales were better than expected, new crop sales a little worse. Old crop sales of 554,500 MT were mostly to Mexico and South Korea and were roughly double expectations. New crop sales were 657,700 MT, which was toward the low end of estimates, mostly to unknown, Japan, Mexico, and Korea. Combined old crop sales + ship are just under 60 mmt, which compares to USDA estimates of 58.3. Note, though, it will be a challenge to ship out the 7+ mmt in outstanding sales over the four remaining weeks of the marketing year, so there will no doubt be some carry-over sales to new crop.

The soybean market closed lower on the day on liquidation of some recent length ahead of tomorrow’s crop report. Trade volumes remained light. The USDA flashed a 135 tmt sale of meal to the Philippines following a record month of meal exports in July. We expect the strong pace of meal sales to continue as Argentina’s ability to meet commitments and demand is strained as bean supply tightens in that country. Recent rains were needed and beneficial for crops.  Now, we have entered a drier pattern where rains will mostly be limited to the eastern belt and S Plains. The Dakotas and MN appear to be most vulnerable to warming and drying conditions during this stretch of 10 days or so. Follow up rains will be counted on to maintain top end yield potentials in beans.

Weekly export sales report featured strong soybean (422 old and 533 new) business coming in on the top end of trade expectations. In the breakdown, there was 292 tmt of old crop beans cancelled by unknown and another 252 tmt resold to alternate destinations while China straight cancelled 74 tmt.   These cancellations and resales are not unexpected and overall sales are very good for this time of year.

There are two sides to this report, US crops and World crops. The US crop side of the report is expected to be bearish because the USDA is likely to increase their corn and soybean yields, adding to the new crop carryouts. This is a survey-based estimate by the USDA based off of stalk and ear counts, they will not pull back husks until the September estimate so tomorrow’s yield historically can be quite different than final yields. The average estimate on corn yield is 176.2 with the USDA last at 174.0 – the average estimate on bean yield is 49.6 with the USDA last at 48.5. The carryout in corn will go up, but it is still going to be well below last year’s and recent year’s carryouts. The soybean carryout will go up and be well above last year’s but part of that is due to the uncertain status of export demand longer term.

It was a mostly uneventful trading session today as the markets await the crop report Thursday morning. Most of the price action stayed between $.04-$.08 lower in Chicago. It also did not help that Matif was trading a couple Euro’s lower. With the report tomorrow, there was just not enough power to sustain the early run. US export wheat basis continues to drop. EU saw another production downgrade overnight Wednesday. This time from Strategie Grains as they put out a projection of 127.7 MMT. But keep in mind, their estimate is not including durum and that crop is probably around 8 MMT so their overall EU crop estimate would be roughly 135.5 MMT. That is in-line, and maybe even a little larger than some of the other private analysts estimates for the EU, and the Matif wheat reacted accordingly falling a couple Euros and remaining on the defensive throughout most of the session. Another disappointing export sales report this morning did not help prices today either.

It is hard to imagine Friday’s crop report data as anything but friendly. It is easy to say that with our markets having already rallied a dollar off its July lows, and Matif having rallied an astonishing 41 Euros over the past month that most of the World production reductions are already in the market, and there is a strong bias to the long side heading into Friday’s report. The thing is, there are just too many areas in this report that the USDA could give us friendly data, and the major downside risk is that the USDA is not as aggressive with the reductions as most people think.

Anna Kaverman

Market Report

Tuesday August 7th, 2018

September corn closed down ¼ at $3.70 ¾ and December closed down ¾ at $3.84 ¼. November beans closed up 12 ¼ at $9.05 ¾ and January 19 closed up 12 at $9.17. September wheat closed down 6 ¼ at $5.68 ¼ and July 19 closed down 5 ½ at $6.05 ¼.Crude oil closed up $.39 at $68.33.

Mixed flat price trade in the grain room today, as the first day of the Goldman Roll dominated volume and interest. Corn has almost seemed to be a bystander of late, taking a “wait and see” attitude toward more dynamic price action in wheat, along with Friday’s pending USDA report. Managed Money traders were viewed net sellers of about 10,000 corn today, which would take them back to a 65,000 net short when including futures and options.

Firm European markets were an early boon to overnight US grains, though Matif Corn gains in particular tended to ebb as the day progressed. In reality, short-run weather conditions are improving in Europe, likely too little too late for wheat, but immature corn and barley could benefit.

With U.S. weather lacking a cohesive story, the focus of domestic traders is on what the USDA may say Friday. The August crop report is frequently full of “curveballs”, given the rather incomplete look afforded at crops. Most traders expect at least some increase in US yields from the “trend-line” data assumed in May-July.  The average analyst guess is for a 176 bpa yield, which would be just below the prior year, but up from the 174 bpa “trend-line”. Such a yield would result in 14.411 BB of production (versus 14.604 billion last year). Minimal attention is being paid to the 17/18 (old crop) carryout. But most are looking for a modest increase in 18/19 carryout expectations given the larger production. The average 18/19 carryout guess is 1.636 billion vs. 1.552 billion in July and 2.027 for 17/18.  The world numbers will be important for wheat, though substantial changes for corn are not likely.

The soybean market bounced higher, gaining back more than what was lost in yesterday’s trade as the market continues to trade back and forth on either side of $9.00 for a moment. Volumes remain very light and farm selling remains sidelined as you would expect at current prices with a promise of government compensation of some amount due to trade tariff loss. Bean prices responded favorably to the lower than expected crop ratings where conditions reflected some of the recent heat and overall dryness notably in parts of IA, MO and the Dakotas with gte ratings off 3 to 67% gte but still strong overall compared to 60% last year.

The news wires picked up on comments by Oil World saying that China will need to buy US beans in the coming weeks as they are unable to displace US supply. The story made the rounds and added additional support prices as are reminded once again that the trade war headline risk can sway the market in both directions. With Brazil nearly sold out of their exportable supply the US has the market until new their new crop becomes available. There is talk that Argentina bought another package of US beans this week.

Linn & Associates published updated crop estimates today with a corn crop of 14.260 billion bushels, on a yield of 174.4 bpa and a bean crop of 4.237 billion bushels, on a yield of 47.7 bpa.  These are final crop estimates, not estimates of what the USDA will publish on Friday. These numbers will change based customer input, field observation, weather analysis, and satellite data.

Last week the market saw a reversal from new highs and it only took the markets three days to bounce right back. Not saying that is going to happen again. In fact, it just might not be the right time for the wheat market to make its next upside move. After all, all three markets have already rallied more than $1.00 off its July lows. The Spring wheat strength could have very easily been tied to the condition reports Monday afternoon which showed a 4% drop in the G&E ratings, well above the expected 1-2% decline. The European wheat contract remains firm, bolstered by more rhetoric about production downgrades. The latest coming out of the France Ag Ministry that downgraded its crop size by 1 MMT down to 35.1 MMT. World values continue to gain sharply on the lower production estimates.

The next crop report will be Friday morning. Analyst are looking for a roughly 30 MB reduction in overall 2018/19 US all wheat production from July’s 1.881 BB estimate. Keep in mind Informa came out with their estimates late last week and is looking for as much as a 56 MB reduction. It is hard to fathom that the USDA will be this aggressive. Spring wheat should see the biggest loss, especially after last month when the USDA gave us a very optimistic 614 MB number. But with the downgrades from the crop tour a few weeks ago, would not be surprised if this number is below 600 MB. Not expecting any big changes for all winter wheat production, but we should see some minor downgrades across the board. Will the USDA dare increase exports 25 MB for a third month in a row? Many traders think they might because of the production reductions around the World. If they do, look for 2018/19 US ending stocks to drop to at least 960 MB, maybe more.

The World numbers will probably be looked at and scrutinized the most. There should be huge production downgrades from several countries in this report, but how much will the USDA lower them. The current estimate for the EU crop is roughly 135 MMT, or 10 MMT below the most recent USDA estimate. Not to mention Russia, Australia, China, FSU, Kazakhstan and Ukraine, just to name a few. Depending on how much the USDA reduces World wheat production numbers will determine where 2018/19 World wheat ending stocks come in at. Would not be surprised if we saw a 10 MMT reduction and this number comes in closer towards 250 MMT vs 260.88 MMT in July.

Anna Kaverman

Market Report

Monday August 6th, 2018

September corn closed up 1 ¼ at $3.71 and December closed up 1 at $3.85 ¼. November beans closed down 8 ¾ at $8.93 ½ and January 19 closed down 8 ¾ at $9.05. September wheat closed up 18 ¼ at $5.74 ½ and July 19 closed up 13 at $6.10 ¾. Crude oil closed up $.59 at $67.94.

Corn was the middle child of the grain room today, caught between double digit gains in wheat and double digit (for most of the day) losses in soybeans.  The end result was a $.01 higher close Monday in a rather “disinterested” day of trade. Less than 200,000 futures traded, even less than Friday. Funds were viewed net buyers of about 5,000 corn today, which would leave them net short just 55,000 combined futures and options.

Crop Progress data after the close was expected. In corn, though no doubt the 3% G-E decline in beans will capture the headlines. Corn Good-Excellent ratings fell just 1% wk/wk. The trade was looking for a 1-2% decline. Notable state downgrades included PA (-10% G-E wk/wk), the Dakotas (each off -5% G-E), and Missouri (off -7%). States that improved included bit-player Colorado (up 9% G-E), North Carolina (+5% G-E), and Ohio (+5% G-E).  National corn G-E ratings of 71% and P-VP of 10% compares to the year ago week’s 60% and 13%. The accelerated progress of the crop continues to be a feature; 96% was silking and 57% was in the dough stage, the latter of which was 20% ahead of the five year average.  12% of the corn crop was dented, versus 6% average and 6% year ago.

On the weather front, the feature early week is likely the wetter 8-14 day outlook, which applied some overnight pressure to beans. The last 30 days or so has been dry in more spots than not, which could end up taking the top end off corn yields in areas that didn’t have great subsoil moisture going in. Rains over the next five days are forecast to benefit the Eastern Belt, though much of the Western Belt will likely go without.  None of this will likely impact Friday’s USDA report estimates, which is strictly an ear count.

The soybean market set back as we consolidate trade in this $9.00 area for the moment on November. Look for the market to be supported in the overnight by bigger than expected drop in this afternoon’s condition ratings. The keys to the markets at the moment (in no particular order) are trade and trade negotiations, weather and Friday’s crop report. For the bull, you can point to strong domestic demand from both the exporter and crusher. For the bear, you can point to unresolved trade disputes that leave long term trade with China in limbo while we maintain adequate old crop supply and keep an eye on another potential bin buster in the field.

If a trade deal is reached, you could realistically see beans rally $.50 – $1.00 from current levels in the blink of an eye as any agreement likely comes with the benefits of sizeable export commitments as well as certainty and relief. If you cannot make a deal, prices likely continue to languish with limited upside although with last month’s lows I think we have already priced in the fear and panic driven worst-case scenario. Beans face additional headwinds with a crop report on Friday that will highlight stats that are not bullish, particularly with new crop demand numbers that assume there will not be a deal with China and the expectations that the USDA will raise yields due to favorable crop ratings and growing conditions for the most part to this point.

Rains yesterday and into Tuesday are going to bring some needed moisture to crops before a drier bias sets for the Midwest the balance of the week. Bean conditions reflecting some of the recent heat and overall dryness notably in parts of IA, MO and the Dakotas with gte ratings off 3 to 67% gte but still strong overall compared to 60% last year. The states that saw the greatest deterioration were IA -3, KY -5, MS -5, MO -6, NC -8, ND -9, SD -4 and TN -3.  States that saw the most improvement were AR +2, MI +3 and OH +7. The crop is 75% setting pods vs. 60% last week and 63% this time last year.

The twelve consecutive lower starts to a week seems like a distant memory as the wheat complex has posted back-to-back strong performances to start a week for the first time since May. Today’s gains surpassed last week’s strong start, which may be an omen for what lies ahead for the wheat complex this week. With conditions down double from what they were expecting, do not be surprised if Spring wheat re-establishes itself as the leader of the complex tomorrow. With all the production reductions in countries around the World, the wheat complex has distanced itself away from the rest of the grain complex (corn only a $.01 and beans, meal and oil all lower). It is crop report week, and Friday’s report could be a very dynamic report for wheat.

The biggest piece of news as we started the session today was the fact we had another strong move out of Black Sea wheat prices. The strength coming out of the European markets provided a spark to the US wheat markets, which saw modest overnight gains quickly turn into double digit gains within the first few minutes of the day session.

Spring wheat conditions were down 4% double what was expected as the USDA may be playing a little catch up with the Spring wheat tour data from a couple of weeks ago. The 74%G&E rating is still well above last year’s rating we saw at this time 32% G&E. Idaho was the only state to see some improvement, with every other state declining some. Spring wheat harvest moved up 9 and is now 13% complete vs 22% this time last year and the five-year avg of 14%.

Anna Kaverman


CORN – Corn benefitted this week from uncertain yield potential and the rally in the wheat market, which was a result of shrinking world wheat production.  Dryness in Ukraine, European Union, Russia, Australia, and Canada have resulted in lower world wheat production forecasts.  Europe’s Matiff wheat hit five-year highs during the week.  A big boom to wheat came late in the week on an initial report that Ukraine was going to limit wheat exports.  Wheat prices shot to calendar year highs.  A short time later during that trading session, subsequent explanation that the Ukraine government wasn’t going to unilaterally set an export limit, but would be working as usual with traders on export targets, saw wheat prices recoil $.25-$.30 off the day’s high.  Ukraine is the world’s fifth largest wheat exporter.

Trade chatter about the rush in corn to ear weight reducing early maturation, and increasing talk of yield reducing tip-back on ears, did push corn prices through resistance to its highest level in six weeks.  Corn was 38% in the dough stage as of July 29th versus 20% on average.  92% of the crop was silked compared to 82% on average. Corn conditions were steady at 72% good/excellent.  Corn garnered spillover support from the wheat, but didn’t take out the recent high set earlier in the week at $3.88 ½ in the December contract.  Uncertainty on how little the USDA may increase the corn yield on the August 10th report provided underlying support to prices.  Informa Economics left their US corn yield at 176 BPA with production at 14.392 billion bushels.  Farm Futures did a farmer survey which estimated US corn yield at 175.4 BPA and production at 14.36 billion bushels.  On the July WASDE report, the USDA was using 174 BPA with production at 14.23 billion bushels.  In each of the last three years, the USDA August corn production number has been higher than the average trade guess.

On a bright note, it looks like the US and Mexico are making progress on a NAFTA agreement.  Both sides are hopeful a plan will be in place by the end of the month.  Glaringly, Canada has not been invited to the table.

Weekly corn exports were good at 11.5 million bushels for old crop and 38.8 million bushels for new crop.  Total old crop sales are 97% of the USDA target versus 103% on average.  New crop total commitments at 281.7 million bushels are 61% higher than a year ago.  Weekly ethanol production fell by 10,000 bpd to 1.064 million bpd.  Stocks rose 300,000 barrels to 22 million barrels.  Ethanol crush margins rose be 2 cents to 7 cents per gallon.

OUTLOOK:  Underlying demand for corn should continue to be supportive, as well as spillover from a stronger wheat market.  The August 10th WASDE report will be focused on the yield change and its effect on carryout.  It may take a political or weather event to push December corn closer to $4.00 per bushel ahead of the USDA report.

For the week, September corn was 7 ¾ cents higher at $3.69 ¾ per bushel.  December corn rallied 8 cents to close at $3.84 ¼ per bushel.  The high this week in the September contract was $3.74 ¼ and in December it was $3.88 ½ per bushel.  December 2019 corn settled the week at $4.10 ¾ per bushel.  If the trade war with China doesn’t get resolved, how many bean acres will switch to corn next year?  Something to be thinking about.

SOYBEANS – Just to show how sensitive the soybean market is to the Chinese tariff situation, soybeans rallied over 31 cents on Tuesday to a new recent high of $9.22 ¾ per bushel, before settling at $9.19 per bushel, in response to talk that the US and China were going back to the negotiation table. The next day, the US administration rumbled they may raise the tariff percentage from 10% to 25% on the next $200 billion in proposed tariffs on Chinese imports. These new tariffs would go into effect September 5th.   This erased over half of the previous day’s gains.  China responded, saying they are ready with 5%-25% retaliatory tariffs on $60 billion worth of US imports, if the US goes ahead with the next $200 billion in tariffs.  The negative attitude carried over into Thursday and losses were extended on less than stellar weekly export sales.  However, the soybean market maintained its recent reputation as nearly “untradeable” when Friday ended the week with a key reversal higher.

Where the US and China currently stand is questionable.  Depending on which official is talking (it doesn’t matter from which country), one sounds like they want to return to the negotiation table, and the other talks of more tariffs.  China did say they could risk running short on soybeans in the fourth quarter when South American supplies get tight, if they relationship with the US isn’t fixed.

Informa Economics updated their US soybean yield forecast to 50 BPA, an increase of 0.2 BPA from their last refresh.  Their soybean production number was a record 4.445 billion bushels.  A Farm Futures grower survey put the US soybean yield at 49.8 BPA and production at 4.42 billion bushels. In July, the USDA was using 48.5 BPA and 4.31 billion bushels of production.   In each of the last three years, the USDA soybean production forecast has been higher than the average trade estimate.  As of July 29th, 60% of the soybean crop was setting pods versus 4% on average.  Soybean conditions were unchanged at 70% good/excellent, up 11% from last year.

There are a few more details on the government’s plan to help US soybean farmers who have been hurt by the trade war with China. US farmers can begin signing up for direct aid payments in early September.  Of the $12 billion in aid, $7-$8 billion will be available in the form of direct payments. Payments will be based on a formula using this year’s actual production, so growers will have to wait until after harvest before applying.  China may allow soymeal imports from Argentina in the coming months, which are currently not allowed.  Brazilian farmers are facing about a 20% increase in year/year fertilizer and pesticide costs this year.

Weekly export sales were disappointing for old crop at 3.4 million bushels and okay for new crop at 20 million bushels.  Old crop total sales of 2.14 billion bushels have exceed the USDA forecast for 2.085 billion bushels.  China cancelled 120 tmt and unknown cancelled 316 tmt of old crop corn purchases. China still has an estimated 51.5 – 58.8 million bushels on the books with the US for this year.  How much gets rolled of cancelled is yet to be seen with five weeks left in the marketing year.  Next year’s total commitments are running nearly 63% ahead of last year.  The NASS June Crush Report showed 169.6 million bushels of soybeans were crushed during the month, slightly higher than the 168.8-million-bushel estimate.  This was a record for the month of June.

OUTLOOK:  August weather makes the soybean yield.  Whether soybeans can extend this week’s gains into the August crop report without positive political or weather news is uncertain as ending stocks edge closer to 700 million bushels than 600 million bushels.  While it doesn’t look like China will increase the soybean tariff on US soybeans, this week’s action indicated we’re not getting any closer to a resolution to the trade war.  The upside to any price rally in the coming week will have to come from a friendlier relationship with China, or a change to hotter, drier forecasts for the Corn Belt.

The high this week in November soybeans was $9.22 ¼ per bushel.  For the week, it was up 17 cents to close at $9.02 ¼ per bushel.  September meal was down $1.20 for the week at $330.60 per ton and September soyoil was off 15 ticks at $28.52 per pound.

Germany will harvest about 18 mmt of winter wheat in 218 according to DBV president Joachim Rukwied, that’s down about 25% from last year. SovEcon cut the Russian wheat exports forecast by 5.1% to 35 mmt, down from 36.9 mmt. The US wheat crop was rated 78% Good/Excellent, down 1% from last week. It’s 4% harvested, which is 4% behind last year. Spring wheat harvest is expected to get underway next week sometime. Informa economics pegged the “Other Spring Wheat” yield at 45.4 bushels per acre versus the wheat tour at 41.1 and the USDA at 47.05 bushels per acre. Wheat futures were up roughly 30 cents on the week.  The worries over world production have pushed the wheat markets higher.  Contract changes for the week ended August 3, 2018:  Minneapolis September wheat jumped 20 ¼ cents higher to $6.12 ¾, Chicago rallied 25 ¾ cents to $5.56 ¼, and Kansas City was the leader with a 34 ¾ cent surge higher to $5.67 ¼ per bushel.

Anna Kaverman

Market Report

Thursday August 2nd, 2018

September corn closed up 1 ¾ at $3.66 ¾ and December closed up 1 ¾ at $3.81 ¼. November beans closed down 4 ¼ at $8.97 ½ and January 19 closed down 4 at $9.08 ¾. September wheat closed up 2 ¼ at $5.60 ½ and July 19 closed up ¾ at $5.97 ½. Crude oil closed up $1.16 at $67.66.

Another European grain rally had U.S. markets primed for gains early. Corn traded nearly $.08 higher at one point mid-day and wheat was within a few cents of “limit-up”. The markets struggled to hold the froth together late, though, and corn mustered up a $.02 better close. Funds were viewed net buyers of about 5,000 corn today, which would leave them net short 115,000 combined corn futures and options.

Corn export sales this morning were quite good, though they were fully within our expectations. Old crop sales totaled just 292,000 MT, but new crop business very nearly topped 1 mmt for the first time (986,100 mt). “Unknown” and Mexico were the two big buyers of record. Old crop sales plus shipped are easily on a trajectory to meet USDA 17/18 sales goals, while 18/19 forward bookings of 7.16 mmt compare favorably to the 4.44 mmt on the new crop books this time last year. No news on the trade war situation, other than measured progress toward a NAFTA deal.  U.S. saber-rattling on China trade was in the markets today, though by our understanding, the new public comment period for the larger tariff rates also affords additional time for negotiation before they can be imposed?

The major feature of world weather is the continued “hot and dry” in portions of Europe, particularly the north, which is stressing crops and impeding river logistics. Since July 11th, Matif Corn has rallied 16%, or about $1.40/bu equivalent. US weather has featured a slightly bearish element to trade over the past couple of days. The extreme heat built into the early August forecast has been moderated considerably, and the center of the Belt will get a nice drink into the weekend. Argentina’s harvest-that-never-ends moved up to 84% complete, advancing nearly 5% wk/wk. Informa analysts will opine on U.S. corn production tomorrow late morning.

The soybean market closed lower for a second day in a row as the chart works to correct its recent rally. November completed a 38% fib retracement and managed to close $.12 off that low which will act as initial support while the $9.00 offers resistance for now. Tomorrow the weekly chart will be looking for a third consecutive higher close, going home we are up $.12 on the week.   The products didn’t fare any better with meal and oil both under pressure while the wheat and corn markets have separated themselves for a moment due to the European feed grain issue where hot and dry conditions have reduced supplies and sparked world wheat values to multi-year highs.

The bean stats do not have any supply tightness and while US demand is very good right now, the longer-term uncertainty of Chinese trade and overall favorable growing conditions to this point keep a cloud over this market. There were no new developments on the US Chinese trade talks. We get a crop report one-week from today which is likely to include a bump in yield and assumes zero Chinese export demand so in the absence of a positive trade deal announcement or a shift to more threatening weather, the rally should be coming into some stiff headwinds.  Informa will publish their yield estimates tomorrow.

It was a tumultuous day for the wheat complex today, and even though trade was able to post modest gains. Matif wheat futures led the charge overnight and during the early part of the day, before finishing off its highs. That was the theme across the US markets as well. Chicago Sept traded to within one tick of limit up, but just as fast as trade raced up that level, it was equally as quick at giving back those gains and finished the day only a couple cents higher. Part of the huge late morning rally in wheat today was tied to rumors that Ukraine was talking about limiting their wheat exports as their production estimates had been dwindling. However, in a rather quick response, the Ukraine Ag Minister told reporters that there are currently no discussions to limit milling wheat exports. May have been part of the reversal off new highs as well.

Talk of World wheat production reductions have been the talk of trade over the past few weeks, and this has led to World wheat prices soaring, which in turn has led the European contract to race into new contract highs. To put this in better perspective in a time span of only three weeks Egypt has gone from paying an average of $220.27 in its tenders, to an average of $253.31. Another dilemma which has not really surfaced yet has been the tightening supply of good quality wheat stocks. China’s wheat production estimates are down more than 5% from a year ago, and their need to import good quality variety wheat will increase by more than 5.0 MMT for the upcoming year.

For the time being it will not come from the US. Where will the Asian flour millers turn to supply their needs? With Aussie wheat ending stocks this year only half of what it was last year, the Asian demand for wheat probably won’t come from there either. China has opened the door to start importing wheat from Russia, and there is talk that China is going to lift its import tariff-rate quotas for Kazakhstan wheat, but those countries are having production issues as well. With so many countries having production reductions over the past few weeks, the better question may be which country will benefit the most? Eventually, that very well could be the US. We first have to get a little more competitive in price. The wheat complex has settled higher every day this week, and today’s settle puts Chicago wheat $.90 above its July lows and KC $1.00 above its July lows.

A week from Friday is the next USDA crop production and S&D report, and that may very well be the next day of reckoning. There should be huge production downgrades from several countries in this report. In fact, the current estimate for the EU crop is roughly 135 MMT, or 10 MMT below the most recent USDA estimate. Not to mention Russia, Australia, Kazakhstan and Ukraine. I do not envy the USDA as they will have a hard time making this report very believable to many people.

Anna Kaverman

Market Report

Wednesday August 1st, 2018

September corn closed down 7 ¼ at $3.65 and December closed down 7 at $3.79 ½. November beans closed down 17 ¼ at $9.01 ¾ and January 19 closed down 16 ¾ at $9.12 ¾. September wheat closed up 4 ½ at $5.58 ¼ and July 19 closed up 4 ½ at $5.96 ¾. Crude oil closed down $1.13 at $66.50.

After an extended push higher, the corn market finally faced a modest come-uppance. Futures were ‘a little’ lower most of the day, but the selling picked up steam late, resulting in a lower close. The settlement was $.09 below Tuesday’s high. Funds sold out a good portion of what they bought Mon/Tues, selling 15,000 corn today. It is estimated that they are net short 120,000 combined corn futures and options.

After a welcome respite, “Trade War” tariff headlines have once again taken center stage in the grain room. The latest area of concern is the threatened $200 billion “next round” of tariffs on China. A major motivation behind today’s break was the trial balloon floated this morning that the U.S. was considering raising the tax from 10% to 25%. These rumors were later “confirmed” in a conference call after the close. We will see how the Chinese respond tonight, but they continued to play the “victimization” card in response to the rumors earlier today.

Also contributing to the weaker tenor was a shift in the forecast. The most recent model runs appeared to temper the U.S. “hot and dry” expectations in the forward outlook some.  Beneficial rains fell on the Eastern Belt yesterday, relieving a few key Midwest dry spots. Hope this is not too little too late, with pollination near complete for many.

The soybean market set back as the charts corrected with an assist to a re-escalation of trade war fears and a mid-day weather outlook that showed the forecasted heat blast for next week would not stick around and would be a temporary feature only. From a chart perspective, the $.96 rally off the recent low had left us overbought on a near term basis so a correction was due.

President Trump is threatening to raise the threatened tariffs on $200 billion of Chinese imports from 10% to 25% which threw some cold water on the feel-good news that the US and China were looking to resume negotiations. The review period for the remaining $16 billion of the original $50 billion in tariffed imports ended yesterday which means that portion can be enacted at any time.  There is a conference call taking place this afternoon addressing the tariffs.  Elsewhere in the news, Brazil trade data showed July bean export shipments of 10.2 mmt vs. 10.42 in June and 6.95 in July 17.  Meal exports were 1.73 mmt in July vs. 1.56 in June and 1.16 in July 17.  Oil exports were 211 tmt vs. 126 in June and 137 in July 17.  Corn exports were 1.17 mmt vs. 143 tmt in June and 2.322 in July 17.

There was a lot of red across the commodity sector today, but the wheat complex was able to fend off those negative vibes and finish the day modestly higher. Matif wheat futures was once again the star of the show and this was the biggest influence on the US markets. What made today’s gains all the more impressive was how the other grain markets traded. The bean complex struggled after talk surfaced that the Trump administration planned to propose a 25 percent tariff on $200 billion in Chinese imports, up from an original 10 percent, in a bid to pressure Beijing into making trade concessions. Corn initially seemed to be caught in the middle, initially trading a little stronger as Matif corn futures moved into new highs combined with the strength in wheat.

However, for wheat, news continues to be supportive. Kazakhstan’s wheat crop was lowered today, Germany’s crop is at least 25% below last year’s crop and only getting worse, and on Tuesday we had heard of production reductions coming out of Bulgaria and Sweden. The Asian demand for wheat will need to go somewhere. Egypt announced after the close they were back in for wheat. It will be very interesting to see where Russian offers are. We could very easily see the same scenario we saw six weeks ago when Russia had priced themselves out, thus losing out on any business.

A week from Friday is the next USDA crop production and S&D report, and that may very well be the day of reckoning. There should be huge production downgrades from several countries in this report. In fact, the current estimate for the EU crop is roughly 135 MMT, or 10 MMT below the most recent USDA estimate. Not to mention Russia, Australia, Kazakhstan and Ukraine.

Anna Kaverman

Market Report

Tuesday July 31st, 2018

September corn closed up 5 at $3.72 ¼ and December closed up 5 ¼ at $3.86 ½. November beans closed up 28 at $9.19 and January 19 closed up 28 at $9.29 ½. September wheat closed up 7 ¼ at $5.53 ¾ and July 19 closed up 4 ¾ at $5.92 ¼. Crude oil closed down $1.32 at $67.63.

Despite a few intraday hiccups, the corn market kept the bull fires burning, finishing higher Tuesday. Corn has had plenty of assists on its recovery path, catching nice tailwinds from rallies in wheat in recent days, and now a near $.30 bump in beans. Still, give credit where credit is due. In three weeks, corn futures have popped $.35, nearly retracing half of the sharp June break in the market. Funds stayed on the buy side, picking up another 10,000 today.

There was a little extra excitement around the markets on the open. Minutes before the morning session started again, Bloomberg News reporters blasted out headlines implying that the U.S. and China were finally entering more significant talks to “defuse” the Trade War. This was the spark that sent beans higher. In raw numbers, corn exporters have more to gain from a Mexican trade deal (rumors say they want one by the end of August), but a rising tide lifts all boats. There is also some suspicion that China may commit to buy some U.S. corn (and perhaps ethanol) if a trade deal should come to pass. The problem with trying to trade such speculation is no one knows exactly when this will go down.

The return of “hot and dry” conditions to the Midwest later this week also may have helped stem some gains intraday. Though yesterday’s “unchanged” national corn ratings may have soothed junior traders, some notable state-by-state condition declines caught the eye of more seasoned participants. The three major “I” states (30 mil acres) all saw Good-Excellent ratings slip between 1-3%, while neighbors KY/TN (another 2 mil) were off 9-10% G-E.  This was apparently offset by improvements in relatively minor states:  G-E up 4% in South Dakota & Texas, along with a 15% jump in PA and 6% in CO. Those four states account for 10 million acres.

The soybean rally came into to the day displaying some resiliency with a stronger overnight performance despite steady and really good crop conditions in the crop progress report and bigger than expected deliveries. Then, right before the markets reopened after the biscuit break, we poured gasoline on the fire with the news services reporting that the US and China were back to exploring the re-opening of trade talks. The charts have turned, the weather is flashing heat and drying in the west, fund shorts are on the run and now we may have a light at the end of the tunnel with trade. Both the US and China reportedly agree on the need to restart talks although the format, specific issues to be addressed and timetable had yet to be determined.  Coincidentally, or not, tomorrow is the date that the US is scheduled to implement the tariff on the remaining $16 billion in Chinese imports as part of $50 billion package where $34 billion was imposed on the first of this month.

End of the month today and it certainly felt like fund flows were active. It is estimated that funds today bought 12,000 contracts beans. The crop progress report showed soybean conditions at 70% gte, unchanged from a week ago where the market was expecting steady to 1 lower and compares to 59% gte this time last year. Some want to talk about how misleading the conditions are because of the reductions in major crop states yet an unchanged overall rating. Some say that the confidence in the USDA crop ratings is pretty low to begin with, particularly after last year where the condition ratings totally missed the monster crops that were in the fields. Could it be the opposite this year?  I’m not suggesting there are any disasters out there but there are enough pockets out there to doubt some of the high end yield estimates and obviously, August weather will be a big factor.

The wheat complex finished the day on a bit of a run. The rally continued over the balance of the morning and the markets entered the morning break trading right off its evening’s highs. There were a few bits of fresh news that may have sparked the overnight rally in Matif. Russia’s weather forecaster is predicting the Russian grain crop to be down between 15-20% from last year, but that is already known.

Right before trade re-opened for the day session, Bloomberg ran a news article that said the US and China are trying to restart talks aimed at averting a full-blown trade war between the World’s two largest economies. More political talk but it was enough of a statement to fuel a strong start to the day in the soy complex, and that carried into corn and wheat. Today’s midday break was a little puzzling. Not that we expect wheat futures to trade higher every day, but we continuously hear of world wheat production reductions. Remember, we have a USDA crop production S&D report a week from Friday, and there should be production downgrades from several countries in this report.

Anna Kaverman