Grain Notes 7/31/2020 AM Comments

Good afternoon. Markets were steady in corn to higher in soybeans. September corn 1/4 to 3.16 and December corn finished up a 1/4 to 3.27. November soybeans finished the day up 4 1/4 to 8.9250. For the week corn was down 10 and soybeans were down 7. Rather thin day on news either way as the markets continue to focus on the supply coming our way in 45 days. Private yield estimates for corn are now in the low 180s vs 178.5 from the USDA this month as it is expected corn rating will improve on Monday. Western Iowa remains the tough spot in the US, but talk of near record production in Illinois is starting again. There was a daily corn export sale to Mexico of 114k tons, but that was rather routine business. The soy complex benefited from a 220k mt sale of soybean meal to the Philippines. In outside markets the dollar index was up .45 to 93.47, oil is up 49 cents to 40.41, and the Dow is up 114 points. Little progress was made on the next Covid stimulus package this week. 
  • This afternoons commitment of traders report shows managed money increased their corn short by 5,510 contracts to 143,280 contracts and they have been short in corn since August 20 of last year. In soybeans they reduced their long position by 13,648 contracts to take their long position to 62,161 contracts. After the past few days were they were estimated net sellers in corn they are now an estimated 157k short in corn and long 60k in soybeans.
  • USDA will put out June soybean crush data Monday afternoon. The average trade guess is 177.8 mil bus, compared to 157.6 mil bus a year ago.
  • The midday GFS was warmer but still shows below normal temps for next week. It went slightly wetter for the Dakotas, S IA, MO, S IL and drier for NE.
  • With yield estimates peaking into 180s ones brokerage house is predicting December corn to be range bound between 3.20 and 3.45 for the month of August. 
  • It has been well publicized that Brazil will expand its soybean production this coming season. The question now is how much of an increase we may see. Most estimates are for an increase in plantings from 3% to 5% from this year. This would put soybean plantings between 94 and 96 million acres. With normal growing conditions this will give Brazil a soybean crop of 127 mmt to 131 mmt. Even at the low end of this estimate range it will generate unneeded competition for the US in the global market.

Have a great evening.