Grains yet again came into the morning break with solid gains, but in past sessions have been unable to hold those gains once day-trading commences. In outside markets, crude oil slipped slightly off of yesterday’s sharp advance while the US dollar and equity futures were in positive territory.
Traders continue to look for record large corn and soybean crops this fall. The latest private firm to put out a forecast was Linn Group. They peg the US corn yield at 171.4 and an overall crop of 14.8 billion bushels versus USDA’s July yield of 168 and production estimate of 14.5 billion. For soybeans, they see yield at 48.6 and production at 4.07 billion bushels versus USDA of 46.7 and 3.88. USDA will release their first survey-based estimate of crop size next Friday, August 12th.
US corn prices are competitive in the world market as Brazil has shortage issues and Argentina has significantly higher prices than the US. The only real competitive country is the Ukraine, but even they are a few dollars per metric ton higher than the US. Ukraine’s summer season is proving more problematic for corn growth as dry conditions are stressing about ⅓ of the country’s corn crop.
This week’s export sales were solid for corn and soybeans. Wheat was in-line with expectations. A recent discovery of an unapproved GMO strain of wheat in Washington may hamper Asian trade with the US as countries there look for signs of unapproved GMO wheat in their US imports.
WEEKLY EXPORT SALES
OC-Act OC-Exp NC-Act NC-Exp
Corn 331 300-500 896 500-700
Soybeans 542 300-600 1,128 800-1,200
Wheat 470 350-650
The risk of trading futures, hedging, and speculating can be substantial. Grain Hedge is a Branch of Foremost Trading LLC (NFA ID: 0307930)
