Headlines:
- Soybean futures rally on good demand prospects
Soybean futures extended their rally, helped by the developing global demand, as the US Department of Agriculture announced another 468,000 tonne soybean sale to China for 2016-17. This is the ninth straight session when US soybean sales were announced, amounting to 2.7m tonnes of soybean sales for the next marketing year. Chinese soybean imports for the month of July were reported at 7.6bn tonnes, up 2.6% from July, although down 18% from July. And US export inspections were reported at 972,001 tonnes, near the high end of a range of trade forecasts, rounding out a strong demand picture. “Chinese demand is the key driver as soybean sales continue to grow”. - The August WASDE Supply & Demand report out Friday at 11:00 am CT
- Today is the 2nd day of the Goldman Sachs index roll, which should continue through Thursday. This long only index fund sells out front month Sept futures and then buys in December futures to replace
Summary:
Soybean futures put together a second day of double digit gains but it had to struggle to get there. Beans were strong in overnight and pre-market sessions only to have all of its gains erased between 11am and 1:15pm Eastern. In fact, it dipped into negative territory only to come roaring back in the final hour of the regular session. The September contract posted a 13.25 cent gain and the November contract was up 10 cents even. Corn and Wheat tried to join the party but they managed to essentially finish the day flat. The CFTC report from Friday has investors reconsidering the short side sentiment for the Soybean complex but if the projected yield holds up prices will have a challenging time moving higher.
Corn on the other hand has quite a bit of bearish sentiment when viewed from the CFTC COT report but the majority of the decline may already be discounted in the price. If a consolidative low is confirm this week in the Corn complex look for prices to move slightly up or sideways through the middle to late August.
Wheat futures are starting to look poised to pull off a surprise rally. After being up during the overnight and premarket sessions, Wheat declined from about 10:15 to about 11:45. From there it rallied some but only recovered about half of the day’s losses with a net zero gain on the day.
