COMMENTARY 8/27/15

It’s time to get those old bu’s on DP priced before Aug 31st!  ~JUST 2 DAYS LEFT!!

A swath of heavy rain comes in to the NW half of the Corn Belt today and tomorrow and a few spot showers cannot be ruled out in the drier areas of the E Corn Belt on Sat.  Then, our current cool spell will be replaced with 7 to 10 days of unseasonable warmth!   The SE is expecting to receive moisture from Tropical Storm Erika, but isn’t expected to move farter N than N Carolina.

St Louis river level LOWER at +10.4 and forecast  to be 7.9 by  9/1  (Flood Stage is 30.0)

CORN

UP 2   

Solid NEW CROP export sales and help from beans help provide support early, but struggled to hold gains on the warm dry weather outlook.  Old Crop Export Sales were DISMAL at a negative – 5.2 mbu due to cancellations. The Trade was expecting 2-10 million bu.  New Crop Sales were impressive at 38.8 vs 18-26 expected with Mexico buying 15.3 and Unknown bought the remaining 13.5.  Locally, as anticipated, the Columbia Bottoms are reporting early corn yields of 140 – 200 bpa from 18.5 to 23.0 moisture.

Why are so many nervous about China economic well being?? Below are China’s share of World Consumption according to WSJ. 

54% Aluminum, 50%Nickel, 48% Copper, 46% Zinc, 48% Tin, 45% Steel, 40% Lead, 31% Cotton, 30% Rice, 30% Bean Oil, 28% Bean Meal, 23% Gold, 22% Corn, 17% Wheat.  THEY ARE A –>HUGE<– CONSUMER – a consumer that the World can not afford to lose.

Bloomberg Trader Bias:  Bullish 38% (27% LW), Bearish 29% (46% LW), Neutral 33% (27% LW)  

Monday’s Crop Progress:

US CONDITION: 69% G/E , 70% LW  32% LY   STATE OF IL CONDITION: 56% G/E 56% LW

US DOUGH:   85% TW,  71 % LW, 81% LY, and 81% AVG.  The State of IL DOUGH:  91% TW, 84% LW, 92% LY, and 92% AVG

US DENT:   39% TW,  21 % LW, 33% LY, and 43% AVG.  The State of IL DENT:  55% TW, 38% LW, 46% LY, and 58% AVG

 

BEANS     

UP 14     **Now using Nov (X) Futures! 

Low prices stimulate demand!  A new sale of 130 K to Unknown was announced this am and New Crop Export Sales were supportive as well.  Old Crop Export Sales were weak with a negative -4.8 mbu in cancellations (from China and Unknown) vs expectations of 0 – 6 mill bu.  New Crop Sales were strong at 53.6 with China buying 32.6 and Unknown, 14.8.  Old Crop Bean Meal was respectable at 56 K vs 0 – 75 expected and zero needed.   New Crop Meal was 94 K vs 50-200 expected.  Bean Meal exports dropped from 178 K last week to 114 this week, but is still nearly double last years!  Still a month to go before the market gets new beans!

Bloomberg Trader Bias:  Bullish 15% (14%), Bearish 70% (50%), Neutral 12% (33%)

Monday’s Crop Progress:

US CONDITION: 63% G/E  and 63% LW  70% LY   STATE OF IL CONDITION: 52% G/E, 50% G/E LW ~ up 2%

US BLOOMING:  96% TW, 93%LW, 99% LY, and 98% AVG.  The State of IL BLOOMING: 96% TW, 94% LW, 99% LY, and 98% AVG.

US POD SETTING:  87% TW, 79%LW, 89% LY, and 88% AVG.  The State of IL POD SETTING: 88% TW, 81%LW, 93% LY, and 91% AVG.

 

WHEAT          

DOWN 6    

Surprisingly strong Export Sales helped early but some analysts doubt if this sort of volume is sustainable.  Futures faded into negative territory.  An Export Sales of  SURPRISING nature at 19.4 vs expectations of 8-15 mill bu.  At least 14 per week are now needed.  Big buyers were Nigeria, Japan, South Korea, Philippines, and Panama. Iran’s Deputy Ag Minister says no more wheat imports until March 2016 due to a large domestic crop.  Recent Australian rains may raise their crop to 25-26 which  compares to ABARE’s June forecast of 23.6 MMT and the USDA est at 26.0.  The Argentine wheat crop could be as low as 8-9 MMT, vs 12.8 in 14/15 and a USDA est of 11.1.  One research group believes their planted wheat area could drop some 24%, which if comes to fruition, could mean that Brazil would need to buy wheat from other countries.  Keep in mind that Brazil was the second LARGEST US customer in 13/14.

Bloomberg Trader Bias:  Bullish, 24% (9% LW), Bearish 48% (68% LW), Neutral 29% (23% LW)

LAST Monday’s Crop Progress:

Spring Wheat Harvested: 75% TW, 53% LW, 26% LY, 47% AVG.