From: Terry Reilly
Sent: Wednesday, August 22, 2018 4:16:35 PM (UTC-06:00) Central Time (US & Canada)
Subject: FI Evening Grain Comments 08/22/18
PDF attached
Note I will be out of the office during the release of the USDA export sales report on Thursday but will be able to send a note out before 7:30 am CT
Corn.
- Corn finished sharply lower following weakness in other commodities and better than expected results from the annual pro Farmer crop tour. December saw selling after trading below its 50-day MA.
- The funds sold an estimated net 15,000 corn contracts.
Soybean complex.
· The soybean complex traded sharply lower on good US weather and better than expected pod counts found so far in the annual Midwest crop tour. Traders are cautious over US/China talks (Aug 22-23). A US representative said there was no handshake deal, and issue remain.
· The funds sold net 8,000 soybeans, sold 2,000 soybean meal, and sold 3,000 contracts of soybean oil.
· The USDA on Friday may unveil its $12 billion producer, stockpiling, and agriculture chain assistance program. Agri-Pulse via a DJ story mentioned the payment rate for soybean farmers has been preliminarily proposed at $1.65 per bushel and 1 cent per bushel for corn farmers. We ask is the US going to see record soybean acres in 2019? Current price of November 2019 soybeans are around $9.17 and December 2019 corn at $3.98, or 2.3 SX9/CZ9 ratio, at the time this was written. We think USDA will tap FSA acreage data and country yields to determine payments. Problem is some of the large producers don’t participate in the insurance programs, so it will be interesting to see how USDA will approach it.
· The Brazilian real tank earlier and was down for the sixth consecutive day.
- Strategie Grains looks for a 7-year high EU soybean meal import season of 20.2MMT.
· Malaysia was on holiday.
· Wheat futures saw follow through selling amid Russia grain production potential and cheaper supplies by major competitors. Chicago wheat hit a 4-week low.
· Funds sold an estimated 2,000 contracts of Chicago wheat.
· EU December wheat was 0.25 euro lower at 206.50 euros.
Terry Reilly
Senior Commodity Analyst – Grain and Oilseeds
Futures International │190 S LaSalle St., Suite 410│Chicago, IL 60603
W: 312.604.1366
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Skype: fi.treilly
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Evecom-FI082218.pdf