Rose on Grain – CME Grains Move Lower on Week, Annual Pro Farmer Tour Results Mostly Favorable

August 22, 2021 11:44 pm
Published by

Louis W. Rose IV

Corn:

CME Dec corn futures gave up 36 cents last week to finish at 537.  We did not recommend any trading any bias or corn, soybeans, or wheat last week.

The corn market finished lower on favorable reports from the annual Pro Farmer tour, slowing export sales, relatively benign weather conditions across the US, and strengthening US currency.

Domestically, the latest USDA crop ratings showed the crop rated in 62% good, or better, condition, off 2 percentage points Vs the previous release.  The upper Midwest is expected to see significant rainfall this week.  Corn harvest has commenced across southernmost producing regions, with early yield reports remaining quite favorable.  Results from the annual Pro Farmer crop tour suggests better than average yields across most surveyed locations.

Net export sales and shipments were lower Vs the previous sales period at approximately 9M and 33M bu, respectively.  Sales were ahead of the pace required to meet the USDA’s latest projection while shipments again fell short of the pace requirement.  The US is 100% committed and 93% shipped Vs the USDA’s target.  2021/22 sales were slower at around 20M bu.

Internationally, both private and official estimates of Brazil’s safrinha crop continue to move lower.

CFTC Commitments of Traders data for the week ending Aug 17 (futures only) showed that the trade increased its net short position to approximately 2.6B bu; large specs slightly increased their net long to nearly 1.35B bu. 

For an in-depth analysis of CFTC data see our weekly CFTC analysis and commentary.

For this week, the weekly technical analysis for and money flow into the Dec contract remain bearish, with the market also remaining oversold.  Weather, early harvest reports, and anticipation of the Sept WASDE report, which will include updated acreage estimates, will likely be major market moving factors over the near-term for corn, beans, and wheat.

Soybeans:

CME Nov soybeans lost 74¼ cents last week to finish at 1290¾.

CME soybeans finished lower on the same factors affecting the corn market and on slower than expected crush data for July.

Domestically, the latest USDA crop condition ratings showed 57% of the crop rated in good, or better, condition, which is off 3 percentage points on the week.  The southern crop has received much needed rainfall over the past week.  As with corn, producers across the upper Midwest will likely see rainfall this week, as will producers across the southeastern states.  NOPA crush for July was well below average pre-report expectations at just north of 155M bu.  The annual Pro Farmer crop tour suggests average, or better, yields across most surveyed locations.

Net export sales were lower while shipments were higher Vs the previous assay period at approximately 2.5M and 9.55M bu, respectively.  Shipments again fell short of the pace required to hit the USDA’s latest projection.  The US is 101% committed and 97% shipped Vs the USDA’s target.  2021/22 sales were higher at approximately 79M bu.

CFTC Commitments of Traders data for the week ending Aug 17 (futures only) showed that the trade reduced its aggregate net short position to approximately 933M bu; large specs increased their net long to almost 469M bu.

For this week, the weekly technical analysis for and money flow into the Nov contract has remains bearish, with the market now oversold.

CME Wheat:

CME SRW Sept futures lost 46 cents last week to settle at 728¼.

CME futures moved lower sympathy with corn but were likely supported above 700 by the prospect of a dismal spring wheat harvest.

Domestically, US winter wheat harvest is nearly complete, with harvest of the spring crop having commenced.  US spring wheat continues to be rated in abysmal condition.

Net export sales were slightly higher Vs the previous assay period while shipments were modestly lower at approximately 11M and 22M bu, respectively.  Sales were off the average weekly pace required to meet the USDA’s official target while shipments were again ahead of the pace requirement.  The US is 38% committed and 18% shipped Vs the USDA target.  Sales are ahead of the average long-term pace for this point of the season while shipments are near on par with their expected pace.

CFTC Commitments of Traders data for the week ending Aug 17 (futures only) showed that the trade increased its aggregate net short position to approximately 465M bu while large specs increased their net long to around 110M bu.

For this week, the weekly technical analysis for and money flow into the Dec contract remains bullish, with the market no longer overbought.  The 700, 650, and 600 levels are downside targets with 775 and 800 likely to evince strong resistance.

Have a great week!

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    This post was written by Louis Rose