Corn Market Update

? Prices:

• September Corn (CU): $4.03 3/4, down 4 3/4 cents
• December Corn (CZ): $4.22 1/4, down 5 1/2 cents
• September/December Spread (CU/CZ): -18 1/2, up 3/4 cent

? Market Headlines:

• This morning's weekly export inspection report for the week ending July 17th showed corn inspections in the week at 984k MTs, which was below trade expectations and down a little over 25% from last week; this was also the lowest weekly inspection figure since January.

• Cumulative marketing year inspections, with just a little over a month to go, now stand at 58.817 MMTs, which is up 29% from last year.

• Private crop estimates in Brazil are continuing to tick higher, with agribusiness consultancy AgRural on Monday raising its estimate of the country's corn crop from 130.6 MMTs in a June estimate to 136.3 MMTs now. The group mentioned a further increase in safrinha yields as reason for the adjustment, and added that harvest was just over 55% complete as of late last week.

Summary:

Corn futures got off to a lower start on Monday on mostly the same news cycle as we've had for the past several weeks now. It seems as though at last week's lows, the market was likely pricing in a yield figure above where the USDA is at currently (181.0), with the combination of pollination issues and a hotter forecast into August then causing a little bit of break pumping to be seen from there. From a price standpoint, without an extended period of hot/dry weather we see spot corn futures trading a somewhat narrow $4-$4.25 trading range in the short term, with it likely taking actual combine data to send the market one way or the other from there.

Soybean Market Update

? Prices:

• August Soybeans (SQ): $10.15, down 12 3/4 cents
• November Soybeans (SX): $10.26, down 9 3/4 cents
• August Soybean Meal (MQ): $270.50, down $3.50/ton
• August Soybean Oil (LQ): 56.07, up 0.25 cents/lb
• August/November Spread (SQ/SX): -11, down 3 cents; new contract low at -11 1/2

? Market Headlines:

• Weekly export inspection data this morning for the week ending July 17th showed soybean inspections in the week at 365k MTs, which was at the upper end of trade expectations and up more than 140% from last week's total. Cumulative inspections now stand at 46.782 MMTs, up 10% from last year.

• Newswires reported over the weekend and throughout the morning this morning that US President Trump and Chinese President Xi Jinping were expected to meet in person either October 31st or November 1st on the sides of the APEC economic summit in South Korea, as tensions continue to simmer between he two sides.

• It is unclear at this point whether a trade deal is expected to come from the meeting, with a previous August 12th deadline still to pass between now and then.

• Official Chinese import data shows June soybean imports from Brazil were up nearly 10% from the same month last year at 10.62 MMTs, while shipments from the US were up more than 20% at 1.58 MMTs. China has notably still not made any new crop US purchases.

Summary:

Soybeans led to the downside on Monday, as weekend news regarding Brazilian imports and seemingly negative developments in negotiations with the EU led traders to the sell side of the space throughout the day. There is also chatter happening on social media regarding marked improvement in the soybean crop, especially in Illinois, following recent rains and warmer weather over the past week, which would possibly show up in this afternoon's dataset. Like last year, the lack of new crop purchases by number one buyer China has continued to act like a dark cloud over the whole of the complex as we go into August, with there being little sign either politically or from a price standpoint that this changes anytime real soon.

? Prices:

• September Chicago Wheat (WU): $5.42 1/4, down 4 cents; inside day lower
• December Chicago Wheat (WZ): $5.63 1/4, down 3 3/4 cents; also an inside day lower
• September/December Spread (WU/WZ): -21, down 1/4 cent

? Market Headlines:

• Inspection data in this morning's update showed wheat inspections in the week ending July 17th at 732k MTs, which was well above the upper end of trade expectations and up 64% from last week; this was also the largest figure for this particular week since 2008.

• Cumulative inspections in the marketing year that began June 1 are now seen at 3.021 MMTs, which is up 14% from last year compared to down 3% on last week's report.

• Export prices out of Russia last week continued to rise according to market analysts, with the price of 12.5% pro wheat for August delivery quoted at $236/MT, which was up $7 from the week prior.

Summary:

Wheat futures saw further short covering early in the session this morning, and were also helped by Russian exporters being momentarily caught slightly too bearish, with August exports expected to be up from July as new crop bushels hit the market. However, the buying didn't last, with spill-over selling from the other markets finding its way to the wheat space at mid-morning.

In Other News

• Cattle markets made new contract highs to start the week following a bit of consolidation last week:
• August live cattle: $225.22, up $1.67; new contract high at $225.55
• August feeder cattle: $327.60, up $3.60; new contract high at $328.17
• August lean hogs: $107.35, up 87 cents

• Outside markets saw a quietly mixed to start the week, with input being largely centered on trade progress amid a lack of other notable data:
• Crude oil futures: down 20-30 cents/bbl
• Stock index futures: The Dow Jones index is down 20 points, the S&P500 index is up 10 points, and the NASDAQ is up 100 points; new contract highs today for both the S&P and the NASDAQ
• US $ Index: down 60 points

Weather Outlook

? Short-term Forecast:

• Models expect continued thunderstorm activity across the Corn Belt this week, with the EU model calling for additional rains of 0.5-2" across especially the northern Corn Belt, but more generally the northern 2/3's of the Midwest as ridge-riding systems are expected to continue impacting the same areas as the end of last week.

• Temperatures this week will again warm to well above average by mid-week this week, as daytime highs across most of the Midwest go back to the mid/upper 90's and in some cases triple digits. This heat is seen lasting then into the weekend and into next week, before cooler temps are seen possibly returning in the week following.

? Extended Forecast:

• After trending warmer and drier last week, extended forecasts into August over the weekend reversed course a bit and worked back to a slightly cooler and wetter forecast, which was part of the reason for today's selling. Temperature forecasts in the 10-15 day period are seen going back cooler for most of the Corn Belt, while heat is seen staying confined to the western US.

• On the precip side, the EU week two forecast is wetter in the northern US than the GFS is, while the GFS is wetter across the eastern Midwest and into the East Coast.