MORNING GRAIN COMMENTS

MORNING GRAIN COMMENTS Matt Zeller | [email protected] |Thursday, August 24, 2017 Shade Higher CURRENT TREND: REASON: Shakier corn and especially bean yield prospects emerge as tour progresses, as expected EXPORT SALES @ 7:30 AM; PRO FARMER/FARM JOURNAL CROP TOUR THIS WEEK MORNING TRIVIA: For ever y 100 unmar r ied women age 18 and up in the U.S., ther e ar e how many unmar r ied men? (within one either way) MARKET HEADLINES NIGHT SESSION (to 7:00 AM): Grain Volume: 75,096  Quick editorial: corn and soybeans continue to move in different directions Low Last Chg Vol on the charts; soybean results from the tour are more consistently worrisome Symbol High with pod counts low despite mostly beneficial August weather, and ongoing CU7 342.75 341.50 342.00 +0.00 5,216 Chinese demand creating a potentially tighter S&D given an average crop... CZ7 356.75 355.25 355.75 +0.00 12,369  South Korea’s MFG bought around 60k tonnes of optional-origin corn in a CH8 369.00 368.00 368.50 +0.25 1,434 tender this morning for up to 70k, at $185/tonne C&F for December arrival.  Japan bought 134k tonnes of milling wheat in their regular weekly tender as 967 WU7 406.75 402.75 405.00 +1.75 scheduled, including 99k from the U.S. and 35k from Canada. 256  Iraq purchased 50k tonnes each from the U.S. and AUS in their wheat tender. KWU7 401.00 397.50 399.75 +2.00 1,548  China sold 177k tonnes of corn in their state reserve auction today out of SU7 938.75 932.25 938.50 +3.50 nearly 800k offered from their 2013 and 2014 crops; they also auctioned off 14,287 SX7 942.50 935.75 941.75 +3.75 21k tonnes of wheat from 1.2 MMT offered out of the 2012 harvest. 2,969 SF8 950.75 944.50 950.50 +3.75  Brazil’s government yesterday approved a 20% tax on ethanol imports, in a move to protect local producers from increasing shipments from the U.S. 6,263 SMZ7 297.60 295.60 297.10 +0.60  Russia’s SovEcon raised 2017 grain production estimate from 125.2 to 127.6 BOZ7 35.25 34.99 35.25 +0.19 7,288 MMT, including wheat up 1 MMT to 78.9 MMT; their ‘17/18 grain & wheat export estimates each rose by 400k tonnes, to 44.0 & 32.4 MMT, respectively CLV7 134,723 48.43 48.08 48.20 -0.21  Day three of the Farm Journal Crop Tour estimated Illinois corn yields at 3,472 DXY 93.31 93.08 93.16 +0.09 180.7 bps, down from 193.5 bpa last year and the 187.4 bpa three-year averFUNDAMENTAL UPDATE age; IL pod counts came in at 1,231, versus 1,318 LY and the 1,269 3YA. On Today’s chart shows USDA corn and soybean yield changthe western leg, three Iowa districts were estimated with corn yields from es from the August to September reports and also the Au178.7-185.7 bpa, all below last year and mostly below 3YA’s, while pod counts in those three all came in below LY and the 3YA’s at 986-1,158 pods. gust report to the final yield, since 1993. Corn yields have declined in Sept in six of the last nine years, and in each  Tomorrow afternoon's USDA Cattle on Feed Report is expected to show all U.S. cattle on feed as of Aug 1 at 10.645 million head, or 104.7% of last year; instance the final yield came in below the Aug estimate as July placements are seen at 106.2% of LY with marketings at 104.9% of LY. well (though not often below that Sept figure). Meanwhile, the Aug soybean yield estimate has fallen short of the even ‘16/17 Export Sales Estimates (000 tonnes): Estimate Range / Last Week tual final yield five years in a row now, with the Sept reCorn: 50-250 / 62.4 Beans: 250-450 / 453.2 Meal: 25-100 / 74.2 ports showing higher yields than Aug three years straight... Oil: 8-30 / 23.9  ‘17/18 Export Sales Estimates (000 tonnes): Estimate Range / Last Week USDA Corn Yield Changes (bushels per acre) Corn: 400-700 / 671.8 Beans: 400-600 / 899.4 Wheat: 300-600 / 633.6 12 Meal: 50-150 / 68.8 Oil: 0-10 / 3.0 8 WEATHER UPDATE  5-6 day forecast totals are looking a bit better today with decent corn belt cov- 4 erage altogether; extended maps still look drier, though temps are moving 0 closer to normal/above for the 6-10 day, still varied for the 11-15 day onward. -4 NWS 6-10 DAY OUTLOOK: TEMPS & PRECIP -8 -12

Aug-Sep

Aug-Final

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

-16

Rec -

-236,201

-101,752

-54,855

-63,489

-171,269

-30,005

USDA Bean Yield Changes (bushels per acre)

Aug-Sep

Aug-Final

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

5.0 4.0 3.0 2.0 CFTC MANAGED MONEY & RECORD (Since June 2006) POSITIONS: 1.0 0.0 Corn Beans Meal Oil Wheat KC Wht -1.0 -2.0 -11,000 -4,000 -3,000 7,000 1,000 0 Daily -3.0 -8,115 -12,651 -28,632 69,278 -58,337 34,494 -4.0 Est Net -5.0 409,444 260,433 98,846 125,722 73,662 72,845 -6.0 Rec +

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Answer: 88