Soybeans–
Soybeans made a high at 1061 and settled lower at 1047 in the November contract. The funds got rid of their net short position. Soybeans have seen recent support from soybean oil, which rallied after the EPA announcement on Friday. Larger refiners are expected to pick up more production from smaller refiners, which the market views as bullish. South American soybeans are being purchased by China, while the US awaits trade deal news with China. Fed Chair Powell spoke in Jackson Hole on Friday; he mentioned his concerns about a weaker labor market which he views as potentially more dangerous to the economy than the inflation in issue. The Fed is expected to lower interest rates in September. A weaker dollar should help exports.
September Soybeans (ZSU25) settled at 1025 (-11), high of 1039, low of 1023. New crop November Soybeans (ZSX25) settled at 1047 (-10), high of 1061, low of 1046. Cash price is at 1031 (+3)
September Bean Meal (ZMU25) settled at 295.7 (-1.0) high of 305.6, low of 294.4
September Bean Oil (ZLN25) settled at 54.31 (-0.53) high of 55.14, low of 54.24
The September Meal to Oil ratio (52.13% Meal – 47.87% Oil)
ZSU25 Moving Averages – (1024) 5-day, (998) 20-day, (1010) 50-day, (1017) 100-day, (1020) 200-day
ZSX25 Moving Averages – (1046) 5-day, (1018) 20-day, (1025) 50-day, (1027) 100-day, (1026) 200-day
ZMU25 Moving Averages – (293.7) 5-day, (280.7) 20-day, (280.0) 50-day, (290.7) 100-day, (301.7) 200-day
ZLU25 Moving Averages – (53.14) 5-day, (53.78) 20-day, (54.08) 50-day, (51.24) 100-day, (47.64) 200-day
The Commitments of Traders report for the week ending August 19 showed soybean Managed Money traders bought 35,273 contracts bringing their bringing their net long position to 3 contracts. Producer/Merchants sold -28,135 contracts bringing their net short position to -114,151 contracts. Non-Commercial & Non-Reportable traders net position was -4,791 contracts.
The Commitments of Traders report for the week ending August 19 showed meal Managed Money traders bought 24,070 contracts, bringing their net short position of -85,239 contracts. Producer/Merchants sold -11,089 contracts bringing their net short position to -60,857. Meal Non-Commercial & Non-Reportable traders hold a short position of -40,571 contracts.
The Commitments of Traders report for the week ending August 19 showed bean oil Managed Money traders were net long 31,342 contracts after selling -13,070 contracts. Non-Commercial & Non-Reportable traders net long position was 50,491 contracts.
CORN –
September Corn (ZCU25) settled at 389 (+1), high of 394, low of 388. New crop December Corn (ZCZ25) settled at 412 (+0.75). Cash price is 399 (+1)
It was another slow day for corn to start the week, similar to what was seen towards the end of last week. Since the bearish August WASDE report corn has shown strength, indicating that peak supply fear may have been reached. Corn could have made its bottom below 400 on August 12. Weather for the next 2 weeks is expected to be cooler and drier in the Midwest. If this weather pattern materializes, it would eliminate much of the greenhouse-like weather that persisted for a large part of the summer. In addition, the crop tour showed strong yields matching the USDA but Pro Farmer also found plenty of diseased crop. It is reasonable to assume the corn crop can only get smaller from here.
ZCU25 Moving Averages – (384) 5-day, (383) 20-day, (398) 50-day, (417) 100-day, (432) 200-day
ZCZ25 Moving Averages – (408) 5-day, (406) 20-day, (417) 50-day, (432) 100-day, (441) 200-day
The Commitments of Traders report for the week ending August 19 showed that corn Managed Money bought 31,464 contracts bringing their net position to -144,650 contracts. Producer/Merchants sold -25,041 contracts bringing their net position to -57,745. Non-Commercial & Non-Reportable traders net short position was -163,744 contracts.
WHEAT –
September Chicago Wheat (ZWU25) settled at 506 (+2), with a high of 512, low of 504. December Wheat (ZWZ25) settled at 529 (+2). Chicago Wheat has a cash price of 474 (-2). September KC Wheat (KEU25) settled at 496 (-1).
The wheat market continues trade lower. The COT showed the funds adding to their short position. Plenty of big crops are expected around the world. Exports, domestically, continue to be weak. A weaker dollar should help improve exports. SovEcon estimated an increase in Russian exports to 4 mt from 2 mt in July. Peace talks in Alaska were largely a non-event. Wheat is now well-above support at 500, but upside for wheat could be limited. Wheat failed to participate alongside the rallies in corn and soybeans last week.
ZWU25 Moving Averages – (504) 5-day, (511) 20-day, (534) 50-day, (544) 100-day, (567) 200-day
ZWZ25 Moving Averages – (527) 5-day, (532) 20-day, (555) 50-day, (566) 100-day, (587) 200-day
The Commitments of Traders report for the week ending August 19 showed that Managed Money traders in the wheat market were net short -98,132 contracts, having increased their short position by -8,837 contracts. Producer/Merchants bought 2,615 contracts to bring their net long position to 25,061 contracts. Non-Commercial & Non-Reportable traders were net short -163,744 contracts.
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