Headlines:

  • Ags revive from early lows, but not all post positive closes
    Ags found headway difficult on Tuesday – but not impossible, at least for grains, which recovered a bit of poise as fears for US weather reasserted themselves. Soft commodities closed broadly lower, if comfortably above intraday lows, amid comfortable ideas for supplies. New York cocoa, for instance, ended down 1.1% at $1,817 a tonne for September delivery, after data on the European cocoa crush for the April-to-June period, up 2.1% at 331,850 tonnes, came in at the bottom end of market expectations of 2-3% growth. And this on top of ideas of strong production in the key West African region. “Harvest activities in West Africa are completed [for 2016-17], and development of the next crop is called good,” said Jack Scoville at US broker Price Futures.  “All of the countries in the region expect higher year on year production.”
  • Brazil’s soy output and exports set to fall after current year records
    Brazil’s 2017-18 soybean production and potential exports have both been marked down in a USDA attaché report, ahead of tomorrow’s all-important WASDE figures. The report estimates production for the 2017-18 marketing year, starting in February 2018, at 105m tonnes or 8% lower than the 114m tonnes harvested in the current 2016/17 marketing year. The large 2016-17 crop resulted from “near perfect” growing and harvesting conditions, and has already seen a sharp increase in exports. The attaché expects a record full year export total of 64m tonnes, marginally lower than the official USDA figure of 64.1m tonnes, which may change in the WASDE. Indeed, Brazil’s soybean exports for the first four months of the current marketing year are already 11.5% ahead of the previous one. “The low incidence of pests along the crop cycle, good rainfall distribution in most of the country and increased investment in technology, contributed to record yields by a large margin,” noted the attaché. The average 2016-17 crop yield is put at 3.34 tonnes a hectare.

Summary:

Soybeans finished the day barely higher today after struggling for a good portion of the day. Corn and Wheat were mixed with September Corn losing a cent and September Wheat adding 1 ¼ cent. The dry and hot weather is forecasted to remain in play for at least the next week in much of the northern Plains. Parts of Montana and North Dakota have had some intermittent showers reported but the high temperatures will return in the next few days says the Commodity Weather Group. The eastern half of South Dakota is under a heat advisory because of heat index forecasts slated to reach as high as 105 degrees.  Additionally, the National Weather Service has heat advisories in effect for parts of Nebraska, Iowa, Kansas and Missouri today. The National Weather Service is call for heat indexes to reach as high as 108 degrees. The initial softness today was perhaps a some perhaps a biproduct of some profit taking but the weather in general looks to continue playing a major role in the price action.