July 8, 2020 Comments per MIDCO
Good morning. Corn and soybeans traded mostly lower overnight as weather forecasts have added additional rainfall amounts for the Midwest over the next 1 to 2 weeks. Temperatures are still expected to be above normal into late July, but forecasts are indicating the heat will abate somewhat. Key corn producing areas of the Black Sea region, including Ukraine, have been dry the past 30 days but are expected to get beneficial rains the next ten days. The July supply/demand report will be released Friday morning and trading volume is expected to decrease today and tomorrow as many traders wait until after the report to place new positions. CONAB issued its monthly supply/demand report this morning. It increased its estimate of Brazilian soybean production to 120.9 MMTs from 120.4 last month. The corn production estimate was dropped from 101.0 MMTs last month to 100.6 MMTs. The weekly EIA production report will be released later this morning- expect ethanol production to again be higher as ethanol inventories, which have dropped for 10 consecutive weeks, are indicating that additional production increases are needed. Commodity fund estimated positions include short 183,000 corn and 39,000 Chicago wheat contracts and long 80,000 contracts of soybeans. The forecasts indicating better rain chances the next two weeks will likely keep corn and soybeans on the defensive this morning as we wait for the midday updates from computer models. Have a good Wednesday.