Morning Comments for Monday August 25th, 2014 CORN: Corn traded lower throughout the overnight session and is down 3-4 cents. ProFarmer projected a US corn crop of 169.3 bu/acre. While this is smaller than many private analysts, the trade still seems to believe bigger USDA yields are coming, partly due to ProFarmers tendency to undercut the USDA by 3-5 bu/acre. Harvest commenced across the southern US last week and early yield reports have been positive. Harvest will now slowly spread north. Much of the Midwest will see rain this week but amounts in Missouri and Kansas will be on the lighter end (allowing for harvest progress). The monthly Cattle on Feed report showed 9.837 mln head on feed as of Aug 1, more than expected by the trade as placements exceeded expectations. This report did little to support corn overnight, however. The weekly Crop Progress & Condition report will be out this afternoon but will not yet feature a % harvested figure. Weekly export inspections are out at 10 am. Spot Midwest corn basis was steady firmer again on Friday. The EPA did submit their final 2014 RFS proposal to the White House for review on Friday, a process likely to take several weeks. Open interest in corn continued to fall on Friday, down more than 1,600 contracts. SOY-COMPLEX: The November soybeans spent the night trading lower and come into this morning down 7 cents. It made new contract lows in the process. However, the September soybeans, supported by the aggressively bid cash markets, come into the morning 9 cents higher. On Friday, ProFarmer projected a national soybean yield of 45.35 bu/acre, in line with the latest USDA projection. Recent rainfall could may result in a bump of the weekly condition scores on this afternoons report. Most growing areas have seen 1-3 of rain in the past 7 days. Open interest increased by more nearly 2,000 contracts on Friday. WHEAT: Wheat traded both sides overnight and comes into this morning mixed, led by the SRW futures. The latest CFTC report showed the spec funds covering a portion of their net short position in wheat, which would support SRW futures relative to HRW and HRS futures. Drier weather will be seen across the Northern Plains and Canadian growing regions this week which should allow harvest to resume after most areas saw 1+ last week. Some places received 3+. This not only slowed harvest progress ProFarmer vs. USDA Corn Yield Projections but also threatened the quality of the crop. The presidents of Russia and Ukraine will meet face to face for the first time since July today. The talks come amid tension after Russia sent an aid convoy to Eastern Ukraine without Kievs permission last week and are seeking to send another in the coming days. Since July 1, Kazakh grain exports are running just 70% of what they did a year ago. The outside markets are mostly trading slightly higher including the softs, energies, and stocks. The dollar is also trading higher however, which is negative to commodities. It is another lower start to a week which follows the recent pattern as well as the seasonal history for this time of year.
Posted on: Mon, 25 Aug 2014 13:18:25 +0000
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