Early Market Talk July 31, 2020

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Starting the last day of the week with overall firm tone in ag markets after giving up ground on the week. Current market values have corn off 8 ½¢ on the week with soybeans giving up 6¢. Markets continue to dace largely benign weather offsetting recent Chinese purchases.

At 0630 CZ20 trading 1¢ higher at $3.27 ¾ on volume of 12K contracts. SX20 4¢ higher at $8.92 ¼ on vol of 14K. KC wheat 4 ¾¢ higher.

Dow futures 72 points higher at 26,285. Crude 38¢ higher at $40.29. US $ Index a scratch lower after making another new low for the move overnight. US $ has dropped 11% off the March 23rd spike high of 104.

No deliveries against the SQ20 contract this morning. Meal deliveries at 24 contracts and sbo at 412.

Suspect we will see additional Chinese soybean business announced this morning via 24-hour reporting requirement. To date China has secured just over 8 mmt of US soybeans out of an expected 29 mmt

Yesterday saw the biggest one-day corn sale ever at 1.9 mmt to China and brings the 20/21 crop year total to near 5.7 mmt. Sources have Chinese corn import quotas at 10 mmt so more corn sales expected. For some perspective, yesterday’s 1.9 mmt corn sale is the equivalent of .8 bpa of US corn production.

China continues to sell their domestic reserves at high historical values. Replacing them with US corn near contract lows. Adhering to the sell high buy low philosophy.

NOAA 7-day rain outlook shows some decent rains for the eastern belt. Western areas not much more than a tenth with a small pocket of better rain in extreme SW MN and NW IA. No 90° temps anywhere in the bely through Aug 14th with central Iowa not out of the 70’s several days next week in central Iowa.

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