Soybeans–
Earlier this week, I mentioned the potential for soybeans to move lower due to favorable weather and weak exports. StoneX updated their forecast for soybean yield at 53.6 bpa, while S&P global forecasted yield at 53.5 bpa. The USDA estimated soybean yield at 53.5 bpa in July. If a higher soybean yield materializes, on the August WASDE report, it would result in higher ending stocks and a higher stocks/use ratio. Brazil’s soybean exports are slightly lower compared to last year at 78.4% and 82.2% last year for old crop. Brazil’s new crop export sales are at 16.8%, versus 22.5% last year. Weather for the next 2 weeks is expected to be hotter in the Midwest, with conditions still expected to be favorable.
For the week ending July 31, soybean exports were 612k mt at 94.2% of the USDA estimate. Cumulative inspections are 11.1% above last year. The 5-year average for this time of year is 91.7%.
September Soybeans (ZSU25) settled at 965 (-6), high of 976, low of 962. New crop November Soybeans (ZSX25) settled at 984 (-6), high of 995, low of 981. Cash price is at 965 (+6)
September Bean Meal (ZMU25) settled at 272.6 (-4.4) high of 277.9, low of 270.6
September Bean Oil (ZLN25) settled at 53.72 (-0.05) high of 54.38, low of 53.52
The September Meal to Oil ratio (50.37% Meal – 49.63% Oil)
ZSU25 Moving Averages – (970) 5-day, (992) 20-day, (1013) 50-day, (1017) 100-day, (1021) 200-day
ZSX25 Moving Averages – (989) 5-day, (1009) 20-day, (1025) 50-day, (1025) 100-day, (1026) 200-day
ZMU25 Moving Averages – (272.7) 5-day, (272.7) 20-day, (284.2) 50-day, (293.5) 100-day, (303.6) 200-day
ZLU25 Moving Averages – (54.33) 5-day, (55.17) 20-day, (52.73) 50-day, (50.02) 100-day, (47.04) 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 379 (-1), high of 381, low of 375. New crop December Corn (ZCZ25) settled at 401 (-0.75). Cash price is 403 (-5)
Yield estimates for next week’s WASDE report are predicting a higher yield. Estimates, thus far, show yield estimates between 185-188, with the USDA coming at 181 bpa in July. If the USDA decides to raise yield, the corn market may be in trouble, as September corn is now below support at $4. Weather is expected to be favorable for the foreseeable future. Funds have been adding to their short position, on the recent move lower, as open interest has been increasing.
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 – (386) 5-day, (396) 20-day, (410) 50-day, (425) 100-day, (436) 200-day
ZCZ25 Moving Averages – (407) 5-day, (415) 20-day, (427) 50-day, (438) 100-day, (443) 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 508 (unchanged), with a high of 508, low of 504. December Wheat (ZWZ25) settled at 529 (+0.75). Chicago Wheat has a cash price of 477 (-9). September KC Wheat (KEU25) settled at 511 (+7).
Chicago wheat moved off the lows today at 504, closing unchanged at 508. With the bounce at 504, $5 looks to be strong support/ The wheat market has been in a strong downtrend, with funds still holding a sizeable short position. Open interest hit its highest level since January, showing that more shorts are opening positions. Harvest is underway in the Black Sea region and in the plains. Exports have been strong, up 13% y/oy.
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 – (514) 5-day, (533) 20-day, (545) 50-day, (554) 100-day, (574) 200-day
ZWZ25 Moving Averages – (534) 5-day, (554) 20-day, (567) 50-day, (576) 100-day, (594) 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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