Soybeans–
Soybeans were not able to rally despite trade deal developments. Argentina announced the export tax for soybeans will drop from 33% to 26%. For soybean products, the export tax will be reduced from 31% to 24.5%. Argentina has stated that these export tax reductions are permanent. The export tax reduction and the current weather pattern have weighed negatively on the market, early this week. COT data show ed a reduction in managed money’s net short in meal and soybeans, while they continued to add to their long in soybean oil. A trade deal with China could help the market, along with support from soybean oil.
Exports for the week ending July 24, were 409k mt, which is 93% of the USDA estimate. The 5-year average for exports, this time of year, is 91%. Top export destinations for soybeans were Eygpt, the Netherlands, Mexico, Japan, and Saudi Arabia.
August Soybeans (ZSQ25) settled at 988 (-10), high of 996, low of 986. New crop November Soybeans (ZSX25) settled at 1011 (-9), high of 1018, low of 1010. Cash price is at 990 (-5)
August Bean Meal (ZMQ25) settled at 264.9 (-2.9) high of 268.3, low of 264.6
August Bean Oil (ZLN25) settled at 56.55 (+0.06) high of 56.72, low of 56.04
The August Meal to Oil ratio (48.77% Meal – 51.23% Oil)
ZSQ25 Moving Averages – (1001) 5-day, (1016) 20-day, (1036) 50-day, (1035) 100-day, (1037) 200-day
ZSX25 Moving Averages – (1021) 5-day, (1022) 20-day, (1032) 50-day, (1026) 100-day, (1028) 200-day
ZMQ25 Moving Averages – (269.6) 5-day, (271.0) 20-day, (285.0) 50-day, (294.1) 100-day, (304.1) 200-day
ZLQ25 Moving Averages – (56.30) 5-day, (54.88) 20-day, (51.97) 50-day, (49.21) 100-day, (46.73) 200-day
The Commitments of Traders report for the week July 22 showed soybean Managed Money traders bought 21,412 contracts to their bringing their net short to -10,866 contracts. Producer/Merchants sold -19,646 contracts bringing their net short position to -101,647 contracts. Non-Commercial & Non-Reportable traders net position was -13,480 contracts.
The Commitments of Traders report for the week ending July 22 showed meal Managed Money traders bought 3,273 contracts, moving to a net short position of -129,743 contracts. Producer/Merchants sold -3,960 contracts bringing their net short position to -34,832. Meal Non-Commercial & Non-Reportable traders hold a short position of -78,416 contracts.
The Commitments of Traders report for the week ending July 22 showed bean oil Managed Money traders were net long 55,326 contracts after buying 12,105 contracts. Non-Commercial & Non-Reportable traders net long position was 86,179 contracts.
CORN –
September Corn (ZCU25) settled at 393 (-5), high of 400, low of 392. New crop December Corn (ZCZ25) settled at 414 (-5). Cash price is 425 (-2)
Trade deals were also unable to help corn move higher on Monday. Argentina reduced their corn export tax permanently to 9.5% from 12%. Argentina’s export reduction will help make its exports more attractive. Some parts of the corn belt may see extended rains, which has a chance to add some weather premium. A stronger dollar and tax reductions in Argentina make exports domestically more challenging. Corn needs some bullish news to break the downtrend. A trade deal with China could be the news that helps corn avoid seeing new lows on the year.
Exports for the week ending July 24, were 1.52 mt, which is 88.8% of the USDA estimate. The 5-year average for exports, this time of year, is 79.9%. Top export destinations for corn exports were Japan, Mexico, Colombia, Honduras, and Panama.
ZCU25 Moving Averages – (398) 5-day, (403) 20-day, (416) 50-day, (429) 100-day, (438) 200-day
ZCZ25 Moving Averages – (417) 5-day, (421) 20-day, (432) 50-day, (441) 100-day, (445) 200-day
The Commitments of Traders report for the week ending July 22 showed that corn Managed Money sold -2,610 contracts bringing their net position to -177,365 contracts. Producer/Merchants bought 12,062 contracts bringing their net position to -28,232. Non-Commercial & Non-Reportable traders net short position was -199,643 contracts.
WHEAT –
September Chicago Wheat (ZWU25) settled at 538 (-0.25), with a high of 540, low of 532. December Wheat (ZWZ25) settled at 558 (+0.25). Chicago Wheat has a cash price of 512 (-1). September KC Wheat (KEU25) settled at 526 (-0.50).
The winter wheat harvest is now moving into its final stages. Wheat showed weakness again today, with prices approaching the 2-month low. Despite lower crop rating from the HRS crop tour, no bullish momentum was found. The EU trade deal had no mention of any Ag purchases. Russian wheat exports are expected to be stronger, after Russia updated their export tax. SovEcon forecasts Russian exports for July at 2.1 mt compared to 1.2 mt in June. Russian export strength will likely continue. The COT report showed managed money reduced their net short in wheat by 8k contracts.
Exports for the week ending July 24, were 288k mt, which is 14.3% of the USDA estimate. The 5-year average for exports, this time of year, is 13.6%. Top destinations for wheat exports were Nigeria, Japan, Mexico, South Korea, and Ecuador.
ZWU25 Moving Averages – (541) 5-day, (545) 20-day, (550) 50-day, (559) 100-day, (578) 200-day
ZWZ25 Moving Averages – (561) 5-day, (565) 20-day, (572) 50-day, (581) 100-day, (598) 200-day
The Commitments of Traders report for the week ending July 22 showed that Managed Money traders in the wheat market were net short -52,041 contracts, having decreased their short position by 8,446 contracts. Producer/Merchants sold -6,882 contracts to bring their net short position to -1,123 contracts. Non-Commercial & Non-Reportable traders were net short -65,351 contracts.
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