Early Market Talk August 3, 2022

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Overnight trade has seen both sides of unchanged. Corn and soybeans opened lower and by the second hour of trade had recovered to trade higher. At 0530 CZ22 trading 2 1⁄2¢ higher at $5.96 3⁄4 and inside a 12¢ high to low range. SX22 now a 1⁄2¢ higher at $13.87 and has seen a 27 1⁄4¢ range.

Dow futures at 32,485, 122 pts higher this morning after two losing sessions. Crude off 54¢ at $93.86. US $ a scratch lower. 

StoneX yield and production survey results had a national corn yield of 176 bpa and soybean yield of 51.3 bpa. One bpa lower than the current USDA corn yield and just a scratch below the 51.5 bpa USDA soybean est. 

Soybean yield near the record “revised” yield of 51.9 in 2016. Highest ever monthly soybean yield estimate in a WASDE report was 53.1 bpa in the October of ’18 report. Subsequent revisions had that dropping to a final of 50.6 bpa. One thing for sure, whatever the USDA says on bean yield in their Aug report, it will change. Given recent history, even the final bean yield estimate post-harvest will likely change. 

Heat remains a concern for corn, soybean, and spring wheat. Above-average temps forecast the next two weeks. Night-time temps getting attention as well with plant respiration affected by high night-time temps. 

Pelosi’s visit to Taiwan continues to fuel concerns over U.S.-China political relations. Some quick to recall impact of the previous administrations trade war and tariffs and concerned soybeans again could be used by China as a retaliatory tool. 

Last week soybeans rallied over two bucks. Since Friday’s high, they have dropped a buck. 

CZCH and SXSF worth a look. 

No deliveries against the August contracts again overnight. 

US crop conditions unchanged to better. Trade expecting a 1 pt drop in both corn and soybeans G/E rating. USDA left the corn G/E rating unchanged at 61% and increased the soybean G/E rating by 1% to 60%.

Corn open interest up over 8K contracts on yesterday’s break. Soybean OI declined 2,150 contracts on it’s 62 1⁄2¢ break. 

Iowa and NE corn G/E rating fell 4 and 3% from a week ago. IL, IN and OH corn up 3, 4, and 1% over a week ago. ND corn showed the biggest wk/wk change with a 5% improvement to 79% on its 3 mln acres. 

Both CZ and SX running toward open chart gaps left on the daily chart a week ago today. Chart picture of those will be sent as a follow up to EMT. 

Weekly Export Inspections were unimpressive, despite a solid rebound in soybean shipments. Soybean inspections just over 500K tonnes but roughly 2/3rds of what was needed to hit USDA’s annual projection. Appears both corn and beans will fall short adding to old crop carryout in the September WASDE report. 

Apologies for confusion about the StoneX crop survey yesterday. Results will be out this afternoon around the 3:00 mark. 

Little lighting and thunder overnight in southern Iowa. Fewer rain drops. Corn and beans going to show the stress with temps approaching the 100° mark today. 

My take, we are a sub 177 bpa national corn yield and sub 51 bpa bean yield today. Updated WASDE next week with another subjective yield estimate. 

At 0600 CZ22 trading 5 3⁄4¢ lower at $6.01 1⁄4 in a 9¢ high to low range that has not covered unchanged. SX22 now off 6 3⁄4¢ and lower all nite to this point. 

Dow futures 200+ pts lower at 32,562. Crude off 57¢ at $93/92. US $ Index showing modest strength. 

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