Heavy Sell-Off In Corn, Soy, and Wheat Followed Friday’s USDA WASDE Report
New crop corn ending stocks rose to 1.684 billion bushels due to the increase in the USDA’s yield estimate from 174 bpa to 178.4 bpa, 2 bushels more than the average trade estimate. Dec Corn closed down 10.75 cents. New crop soybean ending stocks also increased dramatically to 785 million bushels, surpassing trade expectations of 638 million bushels and yields were also revised higher to 51.6 bpa. Global new crop ending stocks built unexpectedly to 105.95 MMT, compared to analysts’ average estimate of 99.33 MMT. Nov Beans lost 42.5 cents during Friday’s session, the largest one-day drop for new crop beans in 3 years. For wheat estimates, EU production was cut by 7.5 MMT due to drought but Australia and Ukraine saw no changes to their production estimates, despite poor growing conditions in both countries. Russian wheat production was actually increased to 68 MMT, which disappointed the trade. After the report on Friday, Sep Chicago SRW was down 18.25 cents, Sep KC HRW was down 19, and Sep MN HRS closed down 19.25 cents.
Export Sales Announcements
Export sales of 213,372 metric tons of corn for delivery to Mexico. Of the total 142,248 metric tons is for delivery during the 2018/2019 marketing year and 71,124 metric tons is for delivery during the 2019/2020 marketing year. Export sales of 142,500 metric tons of soybeans for delivery to Mexico during the 2018/2019 marketing year.
Friday’s Commitment of Traders Report Showed Bearish Bean and Corn Bets Slow Down
Managed money’s net short position for corn was reduced by 27,588 to 68,025 contracts. Friday’s CoT is showing data from the week ending in Aug 7, before the WASDE report was released. The net short position held by money managers also decreased by 3,493 to 63,066 contracts. Hot, dry weather so far in August in parts of Missouri, Kansas, and S Iowa has caused stress to bean crops. Managed money remains bullish for wheat, increasing their net longs in SRW by 15,074 to 66,351 contracts and HRW by 15,751 to 53,732 contracts.
Thunderstorms Expected Over Texas, Oklahoma, May Bring Relief to N Missouri
Later this week, thunderstorms are forming over areas of Oklahoma and Texas, bringing at least 3 inches of rain. This system will also reach its way over into N Missouri and E Kansas, where the National Weather Service expects around 4 inches of precipitation over the course of the week. Scattered showers are also expected in the east, particularly in Michigan, where 1-2 inches are expected.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)