Grains fell sharply today after higher dollar trade and profit taking ahead of the report.
This morning we started the day weaker continued from the overnight trade and closed towards the lows of the day. There was more bear spreading in the wheat which suggests more profit taking ahead of the USDA report. The estimates for Thursday’s report are located below.
This morning the USDA announced the sales of another 400,000 tonnes of US soybeans to China, 180,000 to an unknown destination, and 100,000 to Egypt. Egypt also bought 120,000 tonnes of US Wheat. Even with this in-flow of demand November Beans managed to finish 13 cents lower on the day. This is likely due to the fact there are still massive longs in the market, and we are seeing position squaring/profit taking before Thursday morning. We could see more of this tomorrow.
The weather forecast has improved as well. Many of the dry areas are going to get much needed rain relief and the wet areas could see some drying. We are getting closer to harvest and crop conditions are still showing high good-to-excellent ratings which many analysts were calling for more deterioration.
The main thing we like to stress is not to lift any hedges at this point. If you need margin room we can talk about moving any marginal positions over to the cash market. Capital preservation and staying power for hedges are very important. **Check the latest corn recommendation**
For those producers that need to get caught up on sales having resting orders in above the markets is never a bad idea. Please give us a call if you have any questions about strategies to take advantage of these price levels.
Reports: Chinese Stocks Report (expected to be released anywhere from now until the middle of August) , USDA Supply and Demand along with Production (August 12th.)
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