Soybeans are overbought. Export inspections fell 17 percent under 6 million bushels. There were zero deliveries last week.
The crop rating is 66 percent where average is sixty. Pod set of 53 percent is above the 48 percent average. The crop is ahead of schedule with above average production potential which increases supply and prices could respond negatively at harvest.
Bullish news: Soybean export demand is strong; over 800,000 tons sold this week. Trader open interest in soybeans increased to 500,000 buy contracts over sell contracts. Trader open interest is now 87,000 buy contracts above sell contracts. Commercial, fund and speculative traders are all buying.
China bought another 326,000 tons. Chinese soybean production is down 3 percent. With the drought in Asia limiting production and exporting of grains, China is increasing supplies of soybeans and other grains.
Each one bushel decrease in corn yield per acre equals a decrease of 81 million bushels total production. Ending stock estimates have declined because the supply to use ratio is the lowest since 1970.
Weekly corn exports 1.3 million tons were at the high end of market expectations. Prices hit the highest level this year. Ethanol production for July hit 873,000 barrels a day. That is up 7 percent from last month and 20 percent from last year. Israel is shopping for 92,000 tons of feed grain, including 48,000 tons of corn and 40,000 tons of grain sorghum.
Bearish news: The crop rating is 71 percent where 62 percent is average. Ninety-three percent of corn is silking where 86 percent is average.
Export inspections were down 26 percent at 3.5 million bushels. South African production is up 11 percent at 2.5 million tons. If the Russian ban on grain exports is factored in, it will take more news to increase corn prices.
Bearish news: Black Sea wheat lands received much needed rain. India has 23 million tons of surplus wheat in storage where 9 million is normal. The rumor is that Russia will allow exports of 700,000 tons of grain that is already in transit and purchased by Egypt and other nations.
Profit taking by traders is to be expected in the wake of upward price movement.
Bullish news: Ukrainian grain harvest is now estimated down 2 million tons at 24 million. Hungarian production is down 20 percent to 3.5 million tons. Spring wheat harvest is 5 percent complete. European nations have harvest estimates that are between 10 and 20 percent lower.
The spring wheat rating is 82 percent; which is way ahead of the 57 percent average. Weekly export sales were huge at 854,000 tons. Importing countries are scrambling to buy wheat. Japan bought 124,000 tons of U.S. wheat.
Export inspections were up 31 percent, reaching 22 million bushels. That number exceeds USDA projections by 3 million bushels. Importers will need to replace purchases of Asian wheat with more expensive U.S. and Australian grain.
Bearish news: Rice lost momentum when wheat prices fell back. Any drop in wheat price will pressure prices for rice. Export demand is flat and world supply is ample for this year. Iraq bought Thai rice on their last tender.
Thailand has large supplies of rice held in reserves. Vietnam is selling rice in large quantities at $380/ton underselling other exporting countries.
Bullish news: The price level supported by wheat represents a selling opportunity. Weekly rice exports reached a surprising 81,700 tons. That is a 50 percent increase after rumors of the Russian embargo.
Rice exports from the United States are steady to Central and South America where freight makes Asian rice more expensive. Rice will be the substitute grain of choice for wheat in Asia and Europe.
Bullish news: Market sentiment in cotton is positive but December resistance of 80 cents will be difficult to overcome. Cotton supply will remain tight despite a large crop. China has halted any attempt at slowing economic growth.
Weekly export sales of 221,000 bales are not a large number but it exceeded market anticipation by 21,000 bales. Cotton quality and yields are above average but the numbers are declining. Any threat to reduce either will drive prices higher.
Traders are buying cotton though some profit taking is evident. Stocks registered for delivery have hit a new decade low just above 30,000 bales. Supply is tightening.
Bearish news: The crop rating is 66 percent. Average for this time of year is 54 percent. 92 percent of U. S. cotton is squaring and 63 percent is setting bolls. Maturity is far ahead of average. Increased production potential is price bearish.
China has released reserve cotton into domestic markets to help control prices. That will limit U.S. cotton exports to China. China is selling 600,000 tons (2.7 million bales) of cotton into domestic markets.