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Highlights, Export Sales, Markets & Rain Days Update 8/5/22

Highlights


Yesterday’s rumors were China bought 2-3 cargos of US soybeans and as many as 6 bean cargos from Brazil all for September shipment. Considering US beans at the Gulf are $25 per ton cheaper than Brazilian beans and Brazil’s short crop this past harvest means they have about 20 million fewer mts of beans to export, we are thinking it is more likely most of those rumored beans sales were US beans. China may be Communist, but they are not stupid Communists. A Benson-Quinn analyst wrote after the close Thursday:

In beans, the price pattern of late has been 3 hard days followed by a quick recovery rally. This recovery rally felt a little different, but I think we’ll have to wait until the overnight for confirmation. From a technical standpoint, I like the price action in beans and meal. Despite signs of weakening over the last couple of weeks, old crop cash values remain firm and indicate there are some needs.

Given the crush margin at the start of this week was $3.70 a bushel compared to $2.37 a year ago and $1.44 two years ago, do not be thinking demand for beans is poor.


Wheat rallied yesterday in sympathy with corn and the sharply weaker dollar. The world has plenty of winter wheat, but very little spring wheat after last year’s poor crop. It looks like North American spring wheat producers are going to store their wheat and hold out for $13 again. Yesterday’s rally in the soft red winter wheat (Chicago) is bull trap. Do not buy it.


The first incoming vessel, the Osprey S, will arrive in the Ukrainian port of Chornomorsk today to begin loading. Two ship loads of corn are expected to leave Chornomorsk and one load of corn to leave Odessa today. Altogether, a bit more than 50,000 mts of corn combined on the three ships. If the grain transport deal works as planned, three ship loads of grain will be dispatched every day. The vast majority of ships will be carrying wheat for the next three months with wheat harvest under way. Initially, they have to ship the corn they were loading when the war started in February.

Speaking of corn, the Romanian corn crop is going below the bottom of historic corn yields chart. The latest corn crop estimate of 8.2 million mts will be the smallest crop since Romania began recording corn production. How hot is it? Yesterday, 36 record high temperatures were broken in France.

So far, China’s military response to Pelosi’s visit to Taiwan is a dramatic live fire exercise off the coast of Taiwan with a few missiles flying over the island of Taiwan.

Bayer announced the company’s profit outlook improved due to unexpected additional net income from the sale of agriculture seed and chemicals. Surprise, surprise… Quarterly corporate financial reports were issued every day since the first week of July. Every financial report Roger has seen from any large company doing business with farmers has had better than expected 2nd quarter profit and increased their overall 2022 profit projection, but you already knew that, didn’t you?

There were 17 lots of soybean meal assigned for delivery today to the long position of 27 July 2022. No soy oil deliveries to 8 July 2022 and no beans deliveries to 24 February.

 

Rainfall totals for the 24 hours ending yesterday morning:


 

Export Sales Tracker



 

Market Data


This morning:

Crude oil is at $88.70, up $0.16

The dollar index is at 105.89, up 0.20

December palm oil is at 3,934 MYR, up 74. The contract high was made April, 29th at 6,384 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.

December cotton is at $95.79, up $1.17 per cwt. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.

December natural gas is at $8.248, down 0.037. The contract high was made June, 8th at $9.675. Natural gas is the primary cost to manufacture nitrogen fertilizer.

December ULSD is at $3.1870 per gallon, down 0.0379. The contract high was made June, 17th at $4.0719. ULSD stands for Ultra Low Sulfur Diesel.

September Dow Futures is at 32,712, up 31. The lifetime high is 36,832 on January 5th, 2022.


 

Rain Days Update


The Western Corn Belt has 1 more rain days in the 10 day forecast than yesterday and the Eastern Corn Belt has 2 less rain daysthan yesterday.


The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/

Explanation of Rain Days


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