Soybeans–
A Bloomberg article came out this morning saying, China’s state-owned conglomerate Citic Ltd. will begin developing large-scale soybean and farms amid the trade war with the U.S. China has already invested large sums of money in developing Brazil’s Ag infrastructure, now they are expanding in Africa to compete in the grain markets.
Temperatures are expected to increase this week through the central part of the country and the Midwest. The forecast shows rains in the upper Midwest, while the plains are expected to be dry. Trade talks are ongoing with many countries in the EU, as well as, India, Brazil, and China. China’s imports from Brazil were up 9% y/oy for June. Managed money added to their record short position, in the latest COT report, while bean oil trader net-long positioning reached a 3-week high
August Soybeans (ZSQ25) settled at 1015 (-12), high of 1028, low of 1011. New crop November Soybeans (ZSX25) settled at 1026 (-9), high of 1043, low of 1026. Cash price is at 1016 (+7)
August Bean Meal (ZMQ25) settled at 275.5 (-3.5) high of 275.4, low of 269.4
August Bean Oil (ZLN25) settled at 5.07 (+0.25) high of 56.12, low of 55.0
The August Meal to Oil ratio (49.94% Meal – 50.06% Oil)
ZSQ25 Moving Averages – (1014) 5-day, (1026) 20-day, (1042) 50-day, (103) 100-day, (1040) 200-day
ZSX25 Moving Averages – (1022) 5-day, (1024) 20-day, (1034) 50-day, (1026) 100-day, (1029) 200-day
ZMQ25 Moving Averages – (269.4) 5-day, (273.7) 20-day, (287.8) 50-day, (296.1) 100-day, (305.7) 200-day
ZLQ25 Moving Averages – (55.50) 5-day, (53.94) 20-day, (51.37) 50-day, (48.62) 100-day, (46.44) 200-day
The Commitments of Traders report for the week July 15 showed soybean Managed Money traders sold -26,062 contracts to their bringing their net short to -32,278 contracts. Producer/Merchants bought 26,095 contracts bringing their net short position to -84,104 contracts. Non-Commercial & Non-Reportable traders net position was -34,902 contracts.
The Commitments of Traders report for the week ending July 15 showed meal Managed Money traders sold -1,537 contracts, moving to a net short position of -133,016 contracts. Producer/Merchants sold -2,863 contracts bringing their net short position to -30,872. Meal Non-Commercial & Non-Reportable traders hold a short position of -85,425 contracts.
The Commitments of Traders report for the week ending July 15 showed bean oil Managed Money traders were net long 43,221 contracts after buying 5,480 contracts. Non-Commercial & Non-Reportable traders net long position was 70,579 contracts.
CORN –
September Corn (ZCU25) settled at 403 (-4), high of 408, low of 400. New crop December Corn (ZCZ25) settled at 422 (-5). Cash price is 435 (+4)
A heat dome will reach the central U.S. and Midwest this week. There’s a chance that some crop stress is added, but the market did not add any weather premium on Monday. The COT report showed some short covering over the past week, with managed money reducing their short position below the 200k contract position held previously. Crop conditions in the EU are expected to be below average, with hotter weather and limited rain. Corn needs some more bullish news to rise above $4.30-$4.40 in the December contract. $4.30 is a strong resistance level.
ZCU25 Moving Averages – (404) 5-day, (406) 20-day, (419) 50-day, (432) 100-day, (439) 200-day
ZCZ25 Moving Averages – (423) 5-day, (423) 20-day, (434) 50-day, (443) 100-day, (446) 200-day
The Commitments of Traders report for the week ending July 15 showed that corn Managed Money bought 29,106 contracts bringing their net position to -174,755 contracts. Producer/Merchants sold -10,113 contracts bringing their net position to -40,294. Non-Commercial & Non-Reportable traders net short position was -190,130 contracts.
WHEAT –
September Chicago Wheat (ZWU25) settled at 542 (-4), with a high of 549, low of 541. December Wheat (ZWZ25) settled at 563 (-3). Chicago Wheat has a cash price of 507 (-6). September KC Wheat (KEU25) settled at 525 (-3).
Wheat is starting to see higher demand. Weekly export inspections for the week ending July 17, showed 732 mt compared to the estimate range of 300-500 mt. A report came out this morning, saying Bangladesh signed an agreement to buy 700k tons of U.S. wheat. Bangladesh is primarily a buyer of Black Sea wheat; however, the Russian crop is just hitting the market due to harvest delays. Despite the delay, the Russian crop is still large. Russia kept their wheat export tax at 0 this week to encourage higher exports before President Trump places new tariffs. Last week, Romanian and Bulgarian wheat prices reached 1-month highs.
ZWU25 Moving Averages – (540) 5-day, (546) 20-day, (550) 50-day, (561) 100-day, (581) 200-day
ZWZ25 Moving Averages – (561) 5-day, (568) 20-day, (572) 50-day, (583) 100-day, (601) 200-day
The Commitments of Traders report for the week ending July 15 showed that Managed Money traders in the wheat market were net short -60,487 contracts, having increased their short position by -4,893 contracts. Producer/Merchants bought 865 contracts to bring their net long position to 5,759 contracts. Non-Commercial & Non-Reportable traders were net short -74,935 contracts.
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