Headlines:

  • Sugar futures drop, after dryness gives twin boost to Brazil output
    Sugar futures lurched lower after industry data showed Brazilian mills accelerating production of the sweetener even faster than investors had expected, as dryness boosted cane harvesting and crop quality. Raw sugar futures for October, which had stood flat in the run-up to the statistics from industry group Unica, tumbled to 13.98 cents a pound at one point, a tumble of 2.9%. The Unica data showed mills in the Centre South, responsible for some 90% of Brazilian sugar output, producing 3.10m tonnes of sugar in the first half of this month – above the 2.97m tonnes produced in the second half of June. The performance also narrowly beat the 3.07m-tonne figure that the market had expected, according to a poll by S&P Global Platts.
  • S. Corn Condition Declines 2%, Soybeans Decline 4%
    Corn – The condition of the 2017 U.S. corn crop declined 2% last week to 62% rated good to excellent. Seven states indicated that the corn condition had improved last week and 10 states indicated that the corn condition had declined last week with 1 state unchanged. Most of the improvements were found in the northern and eastern Corn Belt while most of the declines were found in the western and southern Corn Belt. The top five rated corn states are: Tennessee, Pennsylvania, North Carolina, Texas, and Minnesota. The five lowest rated corn states are: South Dakota, North Dakota, Colorado, Indiana, and Nebraska. Corn conditions declined in the western and southwestern Corn Belt due to the recent hot and dry conditions. The corn showed improvements in some of the northern and eastern areas. Soybeans – The condition of the 2017 U.S. soybean crop declined 4% last week to 57% rated good to excellent. Three states indicated that the soybean condition had improved last week while 15 states indicated that the soybean condition had declined last week. Most of the improvements were found in the northern Corn Belt while most of the declines were found throughout the Corn Belt. The top five rated soybean states are: Tennessee, Louisiana, Wisconsin, Arkansas, and Minnesota. The five lowest rated soybean states are: South Dakota, North Dakota, Ohio, Indiana, and Nebraska. The soybean crop is being impacted by adverse conditions on both ends of the Corn Belt but for different reasons. In the western Corn Belt, it is too dry, whereas in the eastern Corn Belt it is too wet.

Summary:

Yesterday the grain and soybean market gapped down for their night session open and by the end of the regular session the next day, they had recouped a good portion of their losses (although they still finished in negative territory). Today they all gapped up. Soybean filled the gap that was created yesterday but the other two markets did not. After moving higher in early trading, a volatile move back down took hold and all three markets finished the day significantly lower breaking below some key support levels which suggests that prices may be headed lower.

Both Soybean and Wheat finished the day with double digit losses with Beans down about 1.8% and Wheat down about 2.6%. Corn was down 8 cents but that accounted for a 2% loss on the day. Investors appear to be making a shift away from adding premium for deteriorating US crop ratings and perhaps looking instead to the overall global supply and the expected drop in seasonal exports.