Headlines:

  • German farmers’ group trims wheat prospects
    The German association of farm cooperatives trimmed its idea of the country’s wheat harvest by some 1.2m tonnes, citing heavy rain. The association saw production in the EU’s second-ranked wheat grower at 24.21m tonnes, down from the 25.40m tonnes forecast last month. This will leave the crop down 8.8% year on year, and would be the smallest harvests since 2012. But the association was more positive on wheat quality, which was expected to be good despite the rain..
  • Trump Names Six U.S. Governors as Agricultural Advisers
    U.S. Republican presidential nominee Donald Trump named 64 agriculture policy advisers on Tuesday, a lengthy list that includes the governors of Iowa and five other farm states and a former federal agriculture secretary. The announcement came as Trump, a New York businessman seeking his first elected office, looks to improve his standing among voters, including those in swing states such as Iowa.

Summary:

With the Corn, Wheat and Soybean futures prices holding up relatively well against the backdrop of ‘bearish’ USDA WASDE report from Friday, trade floor analysts are beginning to wonder if the grains may have found a bottom. For a few weeks now we have been sharing that the potential for a short term bottom to start during the first week of August was possible. Now we are staring at the prospect of the bearish decline being fully discounted (at least for Corn and Wheat). Soybean is looking like it could make a counter trend correction that might test the area of 1050 but that remains to be seen.

The markets are still trading inside of tight ranges posting marginal gains for Corn and Wheat and a marginal loss for Beans. Much of the recent Soybean demand has been from China. In fact 11 out of the last 12 trading days China has been buying Soybeans. If it were not for China Soybeans would be singing a very different tune right now. Analyst are also starting to suggest that the record projected yield that the USDA is estimating may not really come to fruition. Friday’s projections look to be record shattering but we are also months away from typical revision reports yet to be released. Therefore a lot could change by then. For now a pre-harvest bottom setting in for the next few weeks is looking more probable.

PMW 16 Aug 2016[1]