Free Commentary

By: Dan Hueber –

Grain and soy markets have received a lift once again during the overnight hours, evidently stimulated by reports of poor yield prospects for spring wheat that have been issued from the crop tour this week.  While that news should come as a shock to no one, it certainly cannot hurt to bring this back to the attention of the trade as markets do tend to lose focus on issues when they are not front and center.  Over the past couple weeks, the Minneapolis market has surrendered over $1 as we correct an overbought position but keep in mind, that was basically one-third of the advance that has taken place since lows in April.  Possibly, the reports will be enough to shore up the support once again.

Realistically, that is all we seem to have occurring in corn and beans at this time as well.  November beans bounced very nicely off last week lows around 9.85 and appear to be developing a new range between 9.85 and 10.40 as we await further weather development in the month(s) ahead. In December corn, we have bounced away from support as well but…it is basically the same old, same old.  Just for curiosity sake this morning we computed the average closing price for this contract looking back through October of last year, which turns to be 3.89 ¾.  You will never guess where prices are at this morning as I scratch out these comments; 3.89 ¾. As I have commented in the past, building a foundation such as this after a major down cycle is typical bottoming action for commodity markets and normally the longer you move sideways, the more intense the breakout is once it occurs.  We just have not found the spark yet to light the fuse.

Not much to cheer about in the export sales this past week, especially for the corn market.  For the week ending July 20th, we set a new marketing year low for corn with sales of only 92,000 MT or 3.62 million bushels.  We did sell 192.7k MT to Japan, 57.5k to Mexico and 12.4k to Colombia but cancellations of 194.5k from unknown destination pretty well wiped that out.  Do note that we sold 486.6k MT for the 2017/18 crop year.  Beans sales were more than three times that of corn but at 303,400 MT or 11.15 million bushels but this was still 26% below last week and 9% under the 4-week average.  Of course, to a large extent, it is difficult to call any sales for beans negative as we already sit well ahead of target.  This week the top purchasers were the Netherlands with 139.7k MT, China with 138.5k and Thailand taking 70.3k.  Additionally, we sold 531.8k MT for the 2017/18 crop year and this morning on the daily system there was reported sales of 264k MT to unknown destinations.  Of that total, 198k were for the current crop year and 66k for next. Wheat sales were really not bad at 498,000 MT or 18.3 million bushels, it was 26% below last week, but this was still 5% above the 4-week average.  Here we find Taiwan at the top of the list with 105.2k MT, followed by South Korea at 88.1k and then the Philippines with 35k.