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Export Sales Day, Grains Higher

Grains are higher. Uncertain US weather and talk of lower Europe and Russia wheat crops is helping grain futures.  SU is up 5 cents and near 8.96. CU is up 4 cents and near 3.51. WU is up 3 cents and near 5.20. US stocks are lower. US Dollar is higher. Crude is lower. Gold is higher.

Chinese Ag futures (Sep) settled up 66 yuan, up 19 in Corn, up 3 in Soymeal, up 32 in Soyoil, and up 40 in Palm Oil. Malaysian palm oil prices were up 9 ringgit at 2,416 (basis September) at midsession awaiting June trade data.

Last evening’s GFS model run was notably drier in much of the Corn Belt July 18 – 23. A greater amount of drying is still expected in the second week of the outlook in the region compared to the first week. The position of the ridge of high pressure in the U.S. will likely favor some complexes of thunderstorms to move across the region, and portions of the southwestern Corn Belt may end up driest.

The 11 to 16 day forecast still has both models indicating ridging bringing limited rains and above average temps to the Plains and the Midwest.

Corn futures may be supported by talk of China interest in importing corn. Argentina is the Worlds cheapest.

Matif wheat futures is higher after EU dropped their wheat crop 8 mmt and exports 6 mmt. Russia wheat harvest is 11 pct done and early yields are down 24 oct from last year. Argentina wheat crop prospects also dropping with higher domestic prices potentially lowering exports. Commercials finding difficulty justifying wheat futures sharp rally.

Weekly US wheat export sales are estimated near 400 mt versus 414 last week, total corn 600 mt versus 623 last week and total soybean 1,000 mt versus 1,082 last week. Trade awaiting new China buying US soybean and an US audit of Phase 1 China buying.

US fob soybean prices are near $363 vs Brazil 369 and Argentina 359. US SBM fob prices are near $344 vs Argentina 325. US corn fob prices are near $172 vs Argentina 152. US HRW fob wheat prices are near $230 vs Russia 200, French 218 and UK2 35.

Trade could even up position before tomorrow’s USDA US/World supply a demand report. Most look for little change in soybean and wheat numbers but USDA could lower US corn crop and carryout.

On Wednesday Managed funds were net buyers of 15,000 SRW Wheat; net bought 10,000 Corn; sold 4,000 Soybeans; net sold 1,000 lots of soymeal, and; sold 3,000 Soyoil. We estimate Managed Money net short 24,000 contracts of SRW Wheat; short 173,000 Corn; net long 76,000 Soybeans; net short 47,000 lots of Soymeal, and; long 5,000 Soyoil.

Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.

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Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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