There is little fresh news for the grains and soybeans this morning which has the same three factors; weather, export demand or lack of, and higher US dollar all weighing on markets this morning.
Macro markets are weaker this morning and the US dollar is higher. With lack of fresh news, the grains and beans are drifting lower on spillover from outside trade.
The grains are making fresh lows for the move this morning with corn trading near $4.10, which is 62% retracement of the June low to July high. All three wheats are at new low this morning having retracement most of the June rally. The beans are lower this AM as well but have not notched a lower low for the week just yet. Trade looks to drier weather for the next 10 to 14-days helping the row crops with some analysts starting to raise yield estimates on better than average western crop ratings. The market seems to be overlooking the rains that have fallen in saturated eastern belt and MO these past 5 days. Weather is also weighing on the wheat with global forecasts improving. The former CWB is hosting a crop tour of western Canadian plains. Reports from the first day of the wheat tour found better than expected crops as recent rains have helped the drought stressed wheat and canola. (The ND crop tour starts next week.) Cheaper world grain, soybean and soymeal offers also have US markets pulling back as US corn export demand is lost to Brazil, US wheat export demand is uncompetitive to Black Sea offers and US soybean new crop demand lags last year’s record pace as Brazil and Argentina remain extremely competitive on offers after harvesting record crops this season. Today’s firmer US dollar also plays against export demand for US grains. The dollar today is also weighing on the broad commodities with crude oil testing $50 and gold is trading at fresh 4-year lows. EIA energy stocks report will be released at 9:30 CT and will include ethanol stocks and production. August first notice day is creeping up on us on July 31. Longs need to be out by July 30. The August/Nov calendar spread has firmed another 4 ½-cents overnight and is trading at 18 ½-cent inverse, a 1-month high, as producer selling stalls on lower futures prices.
Today's Author: Kim Rugel