Chicago Agriculture Commodities Finished Mixed

Chicago Agriculture Commodities Finished Mixed

$CORN, $WEAT, $SOYB

Chicago Board of Trade (CBOT) agriculture grains futures finished mixed on the week ended 21 July, as central US weather and technical selling weighed on crop prices.

CBOT Corn futures ended moderately higher, as daily or weekly price movement is solely focused on central US weather. The market has found an elevated price range based on the expanding drought across the Plains and Western Midwest.

Trading will hinge almost entirely on rain in the western Corn belt in coming weeks.

Already intense dryness across the US states of Kansas, Nebraska, South Dakota and North Dakota has capped national yield potential at 165 BPA, and thus harvest lows have been raised to 3.60-3.70 bu.

Based on the weather forecast, the Y 2017 US Corn yield can slip to 159-161 BPA in early August. This would lower US Corn end stocks to 1,750-1,825-M bu and open the market to a rally to new highs.

Wheat futures ended mixed with Spring Wheat higher, Winter Wheat lower, and they were largely range bound during the week.

The market has digested much of this year’s decline in major exporter Wheat production, and current prices are viewed as fairly valued. Major market changes in the next 30 to 45 days will now center on northern hemisphere Corn yields.

However, agriculture analysts note that harvest is ongoing across Europe and the Black Sea, and so far harvest pressure has been rather limited.

Their work suggests there is a strong tendency for world cash markets to bottom in 1-H of August, and so this year’s prices are assured to be much higher than last year.

Soybean was mostly higher during the week on lower crop condition ratings and fund buying. After a record week of Short covering, fund buying continued on building Midwest heat and limited rainfall across the Western Iowa and southern half of Illinois.

Hedgers used the rally for sales, but at the end of the week, November Soybean were more than 20 cents higher with spot futures back above 10.0 bu. Large parts of Iowa, Illinois and the Plains remain short on rain.

Crop ratings have been trending lower and based on last week’s weather, analysts look for national good or excellent ratings to be 1 to 2% lower.

Have a terrific week.

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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