Soybeans–
Rain is moving through Iowa and Nebraska today, with rains expected to continue over the eastern corn belt. Below-average temperatures are expected for the weekend with temperatures increasing again in the week 2 forecast. China trade deal discussions were reported as constructive. Chinese Vice Commerce Minister Li Chenggang said both countries “agreed to push for the continued extension,” which expires August 12. However, President Trump will make the final decision on an extension of the truce. Soybean sentiment leans bearish due to favorable weather, and lack of China trade deal progress.
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 Egypt, the Netherlands, Mexico, Japan, and Saudi Arabia.
August Soybeans (ZSQ25) settled at 975 (-13), high of 992, low of 975. New crop November Soybeans (ZSX25) settled at 995 (-13), high of 1012, low of 995. Cash price is at 977 (-3)
August Bean Meal (ZMQ25) settled at 260.7 (-1.0) high of 268.1, low of 263.3
August Bean Oil (ZLN25) settled at 56.50 (-1.04) high of 58, low of 56.38
The August Meal to Oil ratio (47.99% Meal – 52.01% Oil)
ZSQ25 Moving Averages – (988) 5-day, (1010) 20-day, (1033) 50-day, (1034) 100-day, (1036) 200-day
ZSX25 Moving Averages – (1012) 5-day, (1019) 20-day, (1030) 50-day, (1026) 100-day, (1027) 200-day
ZMQ25 Moving Averages – (269.3) 5-day, (273.9) 20-day, (287) 50-day, (295.6) 100-day, (304.8) 200-day
ZLQ25 Moving Averages – (56.75) 5-day, (55.27) 20-day, (52.28) 50-day, (49.48) 100-day, (46.87) 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 391 (+2), high of 393, low of 388. New crop December Corn (ZCZ25) settled at 412 (+1). Cash price is 412 (-7)
New yield estimates are being released above the USDA’s July estimate at 181 bpa. One research firm estimated yield at 185 bpa., which would imply an additional 350 mb in ending stocks. Cooler weather is expected in the Midwest until the middle of next week. Some major trading partners including, Canada, Mexico, South Korea, and India have yet to come to trade agreements with the U.S. Recent news flow has focused on China but these trade deals will also be important for corn exports. Looking abroad, Ukraine’s Ag union estimates a 2 million ton drop in corn output due to unfavorable weather.
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 – (395) 5-day, (401) 20-day, (415) 50-day, (428) 100-day, (437) 200-day
ZCZ25 Moving Averages – (415) 5-day, (419) 20-day, (431) 50-day, (440) 100-day, (444) 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 523 (-6), with a high of 532, low of 523. December Wheat (ZWZ25) settled at 544 (-5). Chicago Wheat has a cash price of 503 (-8). September KC Wheat (KEU25) settled at 522 (+3).
Wheat is now in a clear downtrend, falling 6 cents today in the September contract. The 3-month low is 506 ¼. The next support on my chart 520-521. Wheat’s break in price has been driven by a lack of any meaningful supply constraints. Overnight Bangladesh made a purchase of 220k tons of U.S. wheat as part of ongoing trade discussions. The one positive in U.S. wheat markets is exports have been strong. SovEcon raised its Russian wheat export forecast to 43.3 mt from 38.3 mt. Ukraine’s exports are down 66% since July 1 y/oy. Cargill estimates Australia’s wheat crop at 33 mt, while the Australian government estimates 30.6 mt.
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%.
ZWU25 Moving Averages – (534) 5-day, (543) 20-day, (550) 50-day, (558) 100-day, (577) 200-day
ZWZ25 Moving Averages – (554) 5-day, (564) 20-day, (571) 50-day, (580) 100-day, (597) 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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