Grains Continue to Trade Higher

MORNING OUTLOOK

Grains are higher  SX is up 17 cents and near 14.78. SMZ is near 432.0. BOZ is near 67.25. CZ is up 11 cents and near 6.66. WZ is up 15 cents and near 8.16. KWZ is up 15 cents and near 8.97. MWZ is up 11 cents and near 9.23.

US stocks are lower. US Dollar is mixed. Crude is higher. Coffee, cocoa, sugar and cotton are higher. Silver and copper are lower.

Pro Farmer Midwest crop tour estimated IN corn yield at 177 vs 193 ly and soybean pod count down 6 pct from last year. They estimated NE corn yield at 158 vs 182 ly. Pod count was down 13 pct from last year.

Soybean futures are higher as Day 2 of the tour also produced some disappointing results. SU IS now less than 20¢ off contract highs, SMU meal made new highs yesterday, soyoil is at its highest level since late June. Nearby board crush margins fell by 13¢ to just under $2.30, but cash margins are reported at well over $4 in some regions. Matif rapeseed extended its gains. Support came from the CBOT rally, weak €uro, and ongoing dryness in Europe. SX next resistance 14.89. USDA August 2022/23 World soybean SD showed stocks growing by only 11 mmt despite an increase in production of 38 mmt, of which 36 mmt is in 2023 S America.

CBOT corn is higher on Pro Farmer IN and NE yield was below last year’s. The tour moves now to the critically important states of IL and IA today before finishing in MN on Thursday.  Arg is about to restrict imports and reduce the payment delay on taxes earned on exports, amidst a growing shortage of foreign exchange. Argentina remains dry. Dalian corn futures are heading for its highest close since July 1st. Matif corn closed up following the CBOT rally and weak €uro. Tension is building ahead of today’s Ukraine Independence Day. US corn yield debate will go on until the combines roll. USDA’s projected 12 mmt increase in S American crops along with a near record US yield with World demand still exceeding production by 5 mmt.

US wheat futures are higher with KC at 4-week highs. Wheat specific news limited and is appears wheat is following corn and soymeal higher. Arg Govt is about to restrict imports and reduce the payment delay on taxes earned on exports, amidst a growing shortage of foreign exchange. Australia wheat futures are trading at 1-week highs. Crops still look generally good. Matif wheat gapped higher. A report saying that Europe’s worst drought in 500 years could continue into November, brought fresh buying on the perceived threat to winter planting. Russia wheat complexity adds it uncertainty with potentially major impact on both domestic and world price. Ukraine is even worse.

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