Soybeans–
Soybeans moved higher to start the week, however more downside may be ahead. Weather for soybean growers has been favorable and South America has been making soybean meal sales, while the U.S has a soybean meal supply glut. Soybean oil could see further downside as soybean meal has been rallying recently. Looking further out, the oil share should continue to gain and rise towards 55%. Soybean oil could hit 55 in the front-month contract after soybean meal slows down. Exports need to improve for soybeans to see meaningful upside.
For the week ending July 31, soybean exports were 612k mt at 94.2% of the USDA estimate. The 5-year average for this time of year is 91.7%.
September Soybeans (ZSU25) settled at 975(+5), high of 976, low of 966. New crop November Soybeans (ZSX25) settled at 994 (+5), high of 996, low of 986. Cash price is at 956 (+3)
September Bean Meal (ZMU25) settled at 277 (+6.1) high of 277.7, low of 269.6
September Bean Oil (ZLN25) settled at 54.40 (-0.08) high of 54.75, low of 53.90
The September Meal to Oil ratio (50.46% Meal – 49.54% Oil)
ZSU25 Moving Averages – (975) 5-day, (996) 20-day, (1016) 50-day, (1017) 100-day, (1021) 200-day
ZSX25 Moving Averages – (995) 5-day, (1012) 20-day, (1027) 50-day, (1025) 100-day, (1026) 200-day
ZMU25 Moving Averages – (269) 5-day, (272.6) 20-day, (285.3) 50-day, (294.3) 100-day, (304.1) 200-day
ZLU25 Moving Averages – (55.58) 5-day, (55.15) 20-day, (52.57) 50-day, (49.79) 100-day, (46.92) 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 387(-2), high of 392, low of 386. New crop December Corn (ZCZ25) settled at 407 (-3). Cash price is 412 (-4)
Weather continues to be favorable for corn. There is no weather premium being added to the market right now. Over the weekend, OPEC raised oil output, which sent crude oil lower. Crude’s move lower added some slight pressure to corn. Meanwhile, the South American harvest continues to move forward, now 74% complete compared to 87% at this time last year.
For the week ending July 31, corn exports were 1.2 mmt at 90.6% of the USDA estimate. The 5-year average for this time of year is 81.6%.
ZCU25 Moving Averages – (390) 5-day, (397) 20-day, (412) 50-day, (426) 100-day, (436) 200-day
ZCZ25 Moving Averages – (411) 5-day, (416) 20-day, (429) 50-day, (439) 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 516 (unchanged), with a high of 523, low of 513. December Wheat (ZWZ25) settled at 537 (unchanged). Chicago Wheat has a cash price of 490 (-7). September KC Wheat (KEU25) settled at 517 (-1).
After a weak performance last week, wheat was unchanged at the close on Monday. Chicago and KC wheat both hit new contract lows this morning. The funds added 13k contracts to their short position. And open interest continues to increase with wheat in a downtrend, showing bearish momentum continues to grow. The wheat market is likely to see further downside ahead.
For the week ending July 31, wheat exports were 340k mt at 16.19% of the USDA estimate. The 5-year average for this time of year is 15.6%.
ZWU25 Moving Averages – (526) 5-day, (539) 20-day, (548) 50-day, (556) 100-day, (576) 200-day
ZWZ25 Moving Averages – (546) 5-day, (559) 20-day, (570) 50-day, (578) 100-day, (596) 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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