** Fund selling and a lack of fresh news continues to pressure CBOT corn, soybean and wheat futures at midday. September corn has reached $3.30/Bu while December corn futures have fallen near $3.45. November soybeans are trying to test support at $9.30 while wheat is holding near unchanged. The market maintains a bearish feel with the charts technically oversold, but still heading lower. Bottom pickers have not been rewarded, and the market may have to get beyond 1st notice day to spark a recovery.
** US elevators tell ARC that farmers are still existing stale DP and cash basis contracts in corn and soybeans. The selling from these elevators and ethanol groups should be completed by Thursday. A portion of the decline is based on fund selling and the ongoing liquidation of long cash connected contracts.
** CBOT brokers report that funds have sold 7,000 contracts of corn, 3,000 contracts of wheat, and 4,000 contracts of soybeans. In soy products, funds have sold 3,000 contracts of soymeal and 300 contracts of soyoil. Funds were early sellers of soyoil and have bought much of those sales back.
** Stats Canada will release its August crop report Thursday morning. ARC expects Stats Can to reveal Canadian wheat production at 24-25 MMTs, with canola production estimated at 17.8-18.5 MMTs. USDA pegs Canada’s wheat and canola harvests at 26.5 and 20.5 MMTs, respectively. Canola futures this week have followed the soy market to very marginal losses, but canola maintains a premium of $55/MT to soy, vs. a slight discount on this week a year ago.
** EU wheat farmers are voting with their actions to curtail cash related selling. Although the spring grain harvest is underway in Russia, cash sales here is also declining amid low prices. A trend of reduced farmer sales is a theme that likely to persist into October. Producers are unwilling to take a loss and sell cash grain/oilseeds at these depressed levels.
** A new tropical storm has formed in the Atlantic and it is named Irma. The storm is expected to take a westerly route and then turn west southwest on Friday. The exact storm path thereafter is up for debate with many of the computer taking the storm in different directions. Following on the heels of Harvey, we are sure that the media will be paying close attention to Irma next week. The midday GFS takes this storm into the Northern Atlantic.
** Midday GFS Weather Model Update: The forecast is quicker with Harvey’s exodus from the Delta on the weekend. Additional heavy rains worth 2-6” will impact; LA, AR, W TN and W KY. The GFS then features another Gulf tropical system Sep 5-8 which could impact E TX, LA and MS. The storm forms in the SW corner of the Gulf. Limited rainfall is offered to the heart of the Corn Belt over the next 14 days. Temps will be cool for the next 10 days with the path of the next Hurricane ( Irma) determining the Central US temp profile thereafter. Lows will reach into the mid 30’s to lower 40’s, but no freeze is foreseen for the N Midwest. The midday model takes Hurricane Irma along the Eastern US and the storm never makes US landfall.
** AgResource Market Comment: Cash connected and fund selling is keeping pressure on the CBOT at midday. A year ago, the CBOT bottomed on Aug 31st as the DP/basis contract selling ended for old crop. End users should be preparing to book cash corn/feed needs to lock down coverage into early 2018. ARC field surveys argue for a smaller US corn/soy yields from NASS – the key question is whether the lower yields show up in the September or October Crop Report?
** GFS 10 Day Rainfall Forecast and Sept 6th Temp Deviation;
