AM Comments 7/28/2016
Thursday, July 28, 2016, 8:07 AM
Submitted by: Joel Pudenz
Currently, corn futures are trading steady to slightly negative after spending most of the overnight session 2 to 3 cents higher on carryover support from Wednesday’s positive close. Looking at the bigger picture (charts, technicals), we’ve traded a fairly narrow 10c range for the past week. After the recent volatility, traders seem to be waiting for fresh news regarding crop size before taking any new substantial positions. The general consensus is that most wouldn’t be surprised to see a yield bump in the next USDA S&D in August (most falling in the 168 to 172 national yield range). We will hopefully get some guidance on these estimates from the plethora of crop tours in the coming weeks.
Soybeans also spent time trading positive overnight, but are now trading a couple cents lower at the 7:45 AM break. There are two big questions surrounding the soybean balance sheet right now: exports & weather. Foreign buyers have shown renewed interest in US soybeans, which has some questioning the final exports number from the USDA. Any substantial increase in exports would once again tighten our ending stocks. As far as weather is concerned, August is an extremely important month. Some areas have received too much rain while others stare at a hot transition to August. There is enough uncertainty here to keep the trade on its toes – any news will likely create volatility (either positively or negatively). The Eastern Corn Belt is forecasted to get some rain in the next 5 days (see below), which will help offset some of the expected heat.
Corn – steady to 2c lower
Soybeans – 2-3c lower
Have a great day!
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