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Soybeans–
Soybeans traded higher today ahead of the WASDE report tomorrow. Last night, the President Trump announced 50% tariffs on Brazil starting August 1st. The Brazilian President Luiz Da Silva cited a recently adopted law in his country that authorizes Brazil’s government to take proportional countermeasures in response to unilateral economic matters taken by other countries. Brazil has hinted a retaliatory tariff but nothing is in place right now.
The average estimate for soybean yield is 52.5 bpa, which is the same as the June report. Soybean production is estimated at 4,334 mb on average, with the high end of the estimate being 4,340 mb and the low being 4,330 mb. In June, the USDA estimated production at 4,340 mb. For ending stocks, new crop is estimated at 303 mb, while old crop ending stocks are estimated at 360 mb.
August Soybeans (ZSQ25) settled at 1012 (+3), high of 1014, low of 1001. New crop November Soybeans (ZSX25) settled at 1013 (+6). Cash price is at 991 (-10)
August Bean Meal (ZMQ25) settled at 271.4 (+2.0) high of 2726, low of 267.6
August Bean Oil (ZLN25) settled at 53.49 (+0.20) high of 53.90, low of 53.04
The August Meal to Oil ratio (50.37% Meal – 49.63% Oil)
ZSQ25 Moving Averages – (1026) 5-day, (1044) 20-day, (1046) 50-day, (1040) 100-day, (1043) 200-day
ZSX25 Moving Averages – (1021) 5-day, (1036) 20-day, (1035) 50-day, (1029) 100-day, (1032) 200-day
ZMQ25 Moving Averages – (272.2) 5-day, (281.8) 20-day, (291.8) 50-day, (299.1) 100-day, (308.2) 200-day
ZLQ25 Moving Averages – (53.75) 5-day, (53) 20-day, (50.54) 50-day, (48.02) 100-day, (45.90) 200-day
The Commitments of Traders report for the week July 1st showed soybeans Managed Money traders sold -23,023 contracts to their bringing their net long total to 425 contracts. Producer/Merchants bought 27,209 contracts bringing their net short position to -119,591 contracts. Non-Commercial & Non-Reportable traders net position was 2,771 contracts.
The Commitments of Traders report for the week ending July 1st showed meal Managed Money traders sold -21,858 contracts, moving to a net short position of -131,938 contracts. Producer/Merchants bought 9,331 contracts bringing their net short position to -29,397. Meal Non-Commercial & Non-Reportable traders hold a short position of -87,896 contracts.
The Commitments of Traders report for the week ending July 1st showed bean oil Managed Money traders were net long 39,411 contracts after selling -4,908 contracts. Non-Commercial & Non-Reportable traders net long position was 63,772 contracts.
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CORN –
September Corn (ZCU25) settled at 399 (unchanged), high of 400, low of 396. New crop December Corn (ZCZ25) settled at 416 (+1). Cash price is 427 (+1)
The July WASDE report will be released tomorrow. The last time yield was raised on the July report was 2003. It is likely that the USDA leaves yield close to unchanged at 181.0 bushel per acre (bpa); however, some analysts have predicted record yields. StoneX forecasts 186.9 bpa, which would add 500 million bushels to ending stocks. A yield change that much higher is probably not going to happen in my opinion, based on the USDA’s recent estimates. The average yield estimate for new crop is 180.7 bpa.
The average estimate for new crop production is 15.746 billion bushels (bb), with estimates as high as 15.953 bb and as low as 15.697 bb. In June, the USDA estimated production at 15.820 bb. The average analyst estimate for ending stocks is 1.722 bb. On the June report, ending stocks were 1.750 bb. With funds short over 200k contracts, a carryout below expectations could be very bullish. The rumors of a Chinese purchase announcement heading into Independence Day already showed how corn can move higher quickly with so many shorts
Old crop ending stocks are expected to be slightly lower with an average estimate of 1.352 bb. The USDA had 1.365 bb for ending stocks in June.
ZCU25 Moving Averages – (407) 5-day, (415) 20-day, (424) 50-day, (438) 100-day, (441) 200-day
ZCZ25 Moving Averages – (424) 5-day, (431) 20-day, (438) 50-day, (447) 100-day, (447) 200-day
The Commitments of Traders report for the week ending July 1st showed that corn Managed Money sold -24,181 contracts bringing their net position to -206,463 contracts. Producer/Merchants bought 34,649 contracts bringing their net position to -26,531. Non-Commercial & Non-Reportable traders net short position was -214,077 contracts.
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WHEAT –
September Chicago Wheat (ZWU25) settled at 554 (+7), with a high of 555, low of 541. December Wheat (ZWZ25) settled at 575 (+7). Chicago Wheat has a cash price of 524 (-0.75). September KC Wheat (KEU25) settled at 534 (+10).
All wheat production is estimated at 1,903 mb. In June, the USDA estimated all wheat production at 1,921 mb. Winter wheat production is estimated at 1,349 mb, slightly higher than the USDA at 1,382 in June. New crop ending stocks are estimated at 893 mb, while old crop ending stocks are estimated at 848 mb. World wheat production is expected to rise slightly with the average estimate at 264.7 mb, compared to 262.8 last month. According to Strategie Grains, the EU crop is forecasted at 130.7 mt, which is a 15% increase over last year. Ukraine wheat prices are starting to move higher now as they are having a slower to start to harvest than usual. Funds have -63k short position.
Overnight there 16 deliveries of KC wheat.
ZWU25 Moving Averages – (550) 5-day, (554) 20-day, (551) 50-day, (567) 100-day, (584) 200-day
ZWZ25 Moving Averages – (571) 5-day, (576) 20-day, (573) 50-day, (589) 100-day, (604) 200-day
The Commitments of Traders report for the week ending July 1st showed that Managed Money traders in the wheat market were net short -63,071 contracts, having decreased their short position by 1,596 contracts. Producer/Merchants sold -3,579 contracts to bring their net long position to 10,630 contracts. Non-Commercial & Non-Reportable traders were net short -76,571 contracts.
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Hans Schmit
Account Executive Walsh Trading
Direct 312-765-7311
Toll Free 800-993-5449
Fax 312 256 0109 fax
hschmit@walshtrading.com
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