Chicago Agriculture Commodities Finished Mixed on the Week

 Chicago Agriculture Commodities Finished Mixed on the Week

$CORN, $WEAT, $SOYB

Chicago Board of Trade (CBOT) agriculture grains futures finished mixed on the week ended 25 August, as fund selling and the professional crop tour weighed on grains prices.

The most active Corn contract for December delivery dropped 12.25 cents weekly, or 3.35%, to 3.535 bu.

September Wheat delivery fell 7.25 cents weekly, or 1.64%, to 4.3525 bu.

November Soybean rose 6.75 cents weekly, or 0.72%, to 9.445 bu.

Corn futures set new contract low, mostly amid a lack of fresh demand news and unexciting reports from Farm Journal’s Crop Tour implemented last week.

Agricultural analysts maintain that the most probable US Corn yield lies within a range of 165-166 BPA, which still will strip 300-400-M bu of supply from the US balance sheet.

US export demand will be lacking in Y 2017, but there are signs of growth in bio-fuel demand. And amid a collapse in Brazilian cash prices, grain traders doubt acreage expansion there will be robust in Y 2018.

Wheat futures also fell to new contract lows as Russia’s Wheat crop estimate continued to get bigger, and the trade fiercely debates Russia’s ability to export more than 29-31-M tonnes. Part of this will hinge upon the severity of Winter weather, but analysts suggest that without abandoning Corn and Barley exports altogether, Russia’s export capacity is roughly 30-31-M tonnes.

Russian production, which will stay robust for years to come, will simply spill into end stocks without massive investment in infrastructure.

The market has digested the boost in major exporter stocks and use.

Moving forward, a supportive outlook is advised and a demand-led recovery is anticipated this autumn.

Amid current world fob spreads, the US market is well positioned to exceed the United States Department of Agriculture (USDA)’s export forecast by 75-100-M bu.

This along with a fall of another 20-40-M bu of US Spring Wheat due to a 1-1.4-M acre rise in abandonment would drop US MY2017/18 Wheat stocks closer to 800-850-M bu. The sharp fall in USD will reduce seeding globally and the market is starting to more closely focus on Australian weather.

It was a firm, but quieter week of trade in the Soybean market that left prices moderately higher at the close Friday. Strong new crop sales, along with the US Commerce Department’s ruling against Argentine and Indonesian bio-diesel imports were supportive.

And the Farm Journal Crop Tour that had the market’s attention last week.

Based on crop samples collected across the Corn belt states, the tour estimated a national Soybean yield of 48.5 BPA, down 0.9 bu from the USDA’s August forecast.

On average, the Tour’s yield projection has been within 0.6 BPA of USDA’s September crop report.

Agriculture analysts note that collective pod counts were the lowest since Y 2013 and that to achieve a 48.5 BPA yield requires another year of high pod weights, which is doubtful. Plus, August will be the 7th or 8th coolest since Y 1895, which is likely to harm the Soyoil yield, further tightening US Soyoil supplies.

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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