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Wednesday Afternoon Comments-July 8th Corn futures closed 2-3 cents firmer in a 7-cent trading range. Strength in corn tied to firmer wheat futures. Funds were light sellers of 2,000 contracts mid-day to add to an estimated short position of 183,000 contracts. Funds shed 135,000 contracts of their short length after the June 30th reports and increased weather concerns but have slowed down on that project as forecasts for July are showing a bit better precipitation chances, though they remain warm temperature-wise. Weekly ethanol report showed production up for the 10th consecutive week with corn usage at 94 mln. bu., though this is 12.7% less than last year. Ethanol inventories increased by 456,000 barrels, the first increase in 11 weeks. Cash ethanol has improved roughly 50 cents a gallon in that timeframe. Brazil’s CONAB released a corn production estimate of 100.5 MMT, down slightly from their June estimate. USDA July S&D numbers are out Friday with plenty of uncertainty regarding both production and demand, with Export demand both this marketing year and next a concern. 19/20 ending stocks are expected to increase to 2.3 bln. bu. vs. 2.1 bln. bu in June. 20/21 ending stocks are expected to decline to 2.7 bln. bu. vs. 3.3 bln. bu. in June. These levels of carryout take much of the edge off monthly S&D reports. (If it verifies, we’ll have taken 600 mln. bu. off 20/21 corn ending stocks and that’s translated, roughly, to a 13-cent gain in CZ.) Weekly export sales in the morning expected in the 300-600 tmt range – not exciting as Brazil and Argentina remain tough competitors.
Soybean futures closed 2-5 cents lower in a 7- cent trading range. Funds were sellers of 4,000 contracts mid-day to cut into their estimated long position of 80,000 contracts. Improving precipitation chances heading into August, along with no export sales announcement to China, was enough to keep futures defensive today. Brazil’s CONAB estimates soybean production at 120.9 MMT vs. 120.4 MMT last month. Pessimistic viewpoint is that Brazil will keep "finding beans" as they continue to offer beans into the world export market. The USDA July S&D report is not expected to be quite as eventful as in corn, with ending stocks for 19/20 at 584 mln. bu. and holding steady while 20/21 ending stocks estimated at 416 mln. bu. is up slightly from June’s 395 mln. bu. Export demand in play on the balance sheets. Weekly export sales expected at 300-800 tmt in old crop and 400-1,000 tmt in new crop.
Wheat futures led the day today, gaining 16-21 cents today as the market rediscovered production issues in the EU and Russia. Funds were active buyers of 12,000 contracts by mid-day to cut into their estimated short position of 39,000 contracts. Weekly exports expected in the 200-550 tmt range. Miller bids remain much better than river bids in the interior as they look for quality.