Grains Weak in the Overnight

Grains were mostly weaker overnight with soybeans off nearly 20 cents and corn fading lower to start the week. Wheat managed to hold on to modest gains. In outside markets crude oil slumped lower as the US Dollar tried to reverse Friday’s sharp sell-off.

Weekend weather was nearly ideal over much of the Midwest as highs in the 80s from eastern NE to OH along with good rainfall totals in NE, MO and parts of northern IL made for good growing conditions. U.S. crop weather remains favorable with improved topsoil moisture in the Delta and an opportunity for enough rain to maintain a favorable outlook for the next ten days. Northern-most Midwest crop areas may receive the least rainfall for a little while.

There seems to be growing sentiment of record yield potential in corn and beans, which could spell even lower prices from here. Aug 12 brings the first survey based crop estimates for corn and beans, but before then there will be some crop tours giving on the ground readings. Private firm Planalytic’s has pegged corn yield at 167.4 and soybean yield at 47.2 based on satellite imagery data.

Russian wheat export prices rose last week, boosted by a weak crop in Western Europe. Black Sea prices for Russian wheat with 12.5 percent protein content were $164 a tonne on a free-on-board (FOB) basis at the end of last week, up from $161.5 a week earlier, Russian agricultural consultancy IKAR said in a note. In the US, wheat prices have fallen below France’s price for the first time since 2013. However, Black Sea prices continue to run at about a $10/MT discount.

On Friday, oilfield services provider Baker Hughes said the number of rigs drilling for oil in the U.S. last week increased by three to 374, the fifth straight weekly rise and the eighth increase in nine weeks. Technically, crude oil is approaching its 200-day moving average around $40.60 and could suggest. If prices remain supported here, it would suggest that Crude Oils Summer decline has been a retracement in a developing uptrend. Alternatively if Crude Oil prices drop below the SMA, it would suggest that prices are trending lower.

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—Kevin McNew