Opening Calls Steady on Dryness, Funds’ Corn Position

Sep 10, 12:38 pm | Sunday Commentary | Share this:

AgResource Pre Opening Sunday Market Calls: Soybeans 1 cent lower to 3 cents higher, corn steady to 2 cents higher with wheat steady to 1 cent higher.   

  Good afternoon! Week-opening calls are steady to firm on continued Central US dryness through September 17-18, and thereafter rainfall looks to be rather scattered in nature, and on a bigger than expected net fund position in CBOT corn futures. Hurricane Irma will wreak havoc upon much of FL in the next 24 hours, but its remnants are still indicated to dissipate rather quickly after reaching AL/GA on Monday. Positioning ahead of NASS’s Sep Crop report, due Tues AM, will be featured.

  Managed funds through the week ending last Tuesday were short a net 110,000 contracts of corn, 87,000 contracts of wheat and 12,000 contracts of beans. ARC estimates that as of Fri evening these positions were little changed, and some short covering is likely on Monday.

Other news over the weekend was absent. ARC does mention that the Fed’s September meeting is just 10 days away (Sep 19-20), and there’s a general consensus that the FOMC is likely think long and hard before raising interest further in 2017. We’ve mentioned in recent wires that world currency relationships have changed slightly but importantly since late 2016, and much focus will stay on the US dollar in the weeks ahead. Key is whether the index can find support at/above 90 points.

  ABARES will also release its quarterly Aussie crop production report on Tuesday and CONAB will update its Brazil harvest estimates this week – though CONAB’s new crop supply and demand forecasts won’t be out till October. Virtually no rain is offered to Australia’s wheat belt over the next two weeks, and many in the trade are now discussing a wheat harvest of just 20-21 MMTs, vs. 35 a year ago.

Central US Weather Pattern Discussion: The GFS & EU are in good agreement near term, but at odds late next week/next weekend. Both models offer very lite shower activity to IN, OH and PA, but totals are not expected to exceed trace amounts to .10”. Complete dryness continues across the remainder of the Central US over the next 5-6 days. Moderate rain will fall across the Dakotas and MN next weekend, but much of the Central Midwest will stay dry, and we note the GFS today has trended drier in the 7-10 day period. The GFS does include soaking rainfall across the Plains and far W Midwest beyond Sep 20th, and while the GFS has been consistent with this outlook, it’s unclear whether it will have much impact on yield potential so late in the season. The midday GFS’s 7-day precip forecast (t0p) and 30-day % normal rainfall are below.

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