Ag Market View for Aug 5.22

SOYBEANS

Quite the week. US Speaker of the House invaded Taiwan triggering expected negative response by China. Ukraine war continues but a few Ukraine grain ships are beginning to ship. US Midwest was mostly warm and dry but analyst estimate USDA August soybean yield unchanged from July. Some are increasing US 2021/23 and 2022/23 soybean carryout slightly higher due to lower exports but China finally returned to buy US 2022/23 soybeans. Once a frontal system mid-week next week passes through the Midwest a stronger ridge of high pressure could build into the Great Plains and the Gulf of Mexico moisture may close as a moisture source for the WCB. The drier air following the frontal system may get trapped over a part of the central and interior southern Plains and the west-central and southwestern Corn Belt where hotter temperatures and limited rain could bring accelerated drying and a new run at crop stress. There remains limited interest by Managed funds to buy commodities due to threat of recession.

CORN

Wax off wax on. CU remains in a 5.80-6.30 trading range. Fact US farmer is not selling Corn and dry weather in EU helps support corn futures on breaks. Lack of heat and dry stress over much of the US Midwest and fact Managed funds have liquidated their large net corn long since May offers resistance. Ukraine war continues but a few Ukraine grain ships are beginning to ship. Once a frontal system mid-week next week passes through the Midwest a stronger ridge of high pressure could build into the Great Plains and the Gulf of Mexico moisture may close as a moisture source for the WCB. The drier air following the frontal system may get trapped over a part of the C and  S Plains and the WC and SW Corn Belt where hotter temperatures and limited rain could bring net drying and some crop stress.

WHEAT

Wheat futures just can’t rally. Today’s US jobs data increased more jobs than expected. This rallied the US Dollar which laid the foundation for US Fed to raise interest rates more than some had suggested. This could reduce demand for commodities. Crude has loss 9 pct in value just this week. One vessel of already loaded Ukraine corn was shipped. 3 more shipped today. Most of the loaded unshipped vessels are Corn but more empty vessels are going into Ukraine ports to load grain. Still some doubt Ukraine will export the 19 mmt of combined corn and wheat 2022/23 exports USDA is forecasting. Some also feel EU and Russia may not ship the 75 mmt of wheat USDA is forecasting. Lower EU corn crop could increase EU wheat feeding and logistic, floating export tax and freight surcharges may slow Russia wheat exports. Matif wheat futures are rallying vs US due to increase demand. India may eliminate 40 pct wheat import duty. India domestic wheat price is record high. USDA is est India Wheat exports at 6.5 mmt.  

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