Grain Futures Slightly Lower to Start

MORNING AG OUTLOOK

Grains are slightly lower. US stocks are higher. USD is lower. Crude is lower. OPEC agreed to increase production in September. Some est Crude could test $55. Gold is higher, rebounding after Fridays US jobs report.  GSI commodity index rejected key resistance. US tariffs could slow World economy. World Weather LH August weather could see below normal rains in east corn belt with normal temps.

SOYBEANS  

SU is near 9.67 and oversold. SMU is testing 20 DMA resistance while BOU is now below 20 DMA. Dalian soybean and palmoil futures were lower, soymeal and soyoil were higher. There were 5 soybean deliveries, LDC was stopper. There were 218 soyoil deliveries,. There were 492 soymeal deliveries. US June soybean crush is est at 196.6 mil bu vs 183.5 ly. Soyoil stocks are est at 1,863 mil lbs vs 2,125 ly. China is looking at Oct-Nov with sources suggesting trying to buy as little as possible from US. Rumors suggest China is buying more Argentina soymeal. Trade est US 24/25 exports 15 below USDA and carryout 40 mil bu higher. Trade also est US 2025 crop 40 mil bu higher and 25/26 exports 145 lower and carryout 190 higher. If true, SX could drop to 9.25.

CORN 

CU is near 3.88. Dalian corn futures were lower. Brazil farmer increased selling  but basis remains firm due to logistics bottlenecks. USDA announced 125 mt US 25/26 corn to unknown and 227 mt US 25/26 corn pervious sale to unknown. US PNW still cheapest to Asia. Trade est US 24/25 feed/residual 100 below USDA and carryout 90 mil bu higher. Trade also est US 2025 crop 170 mil bu higher and 25/26 exports 275 lower and carryout 420 higher. If true, CZ could drop to 3.40. LA, AR and MS have harvested 100-125 mil bu to date.

WHEAT 

WU is near 5.14. KWU is near 5.14. MWU is near 5.70. New chart selling is weighing on wheat futures. All 3 wheat classes are making new contract lows. Bangladesh to buy 220 mt US wheat to cool tariff tension. Failure to have a strong Aug-Oct program risks major exporter end-stocks ballooning higher. Matif futures made new contract lows. Combination of lower imports, lower feed use and higher exports vs USDA suggest US carryout could be 20 mil bu lower. WZ is oversold and could be in a range  of 5.20-5.60.

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