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GRAIN MARKETS: Crops lower for week, traders await USDA report

Crops face cool conditions next week.

Corn futures closed higher on Friday but finished lower for the week for the second straight week as traders take a weather premium out of the market.

Soybeans finished a little lower for the day and lower for the week as forecasts for cool, wet conditions next week should aid seed production.

Winter wheat finished lower for the day and for the fourth straight week, while spring wheat was higher for the day and lower for the week.

Weather maps have rain for much of the Midwest through the weekend and into next week. The latest 6- to 10-day (August 9 to 13) and 8- to 14-day (Aug. 11-17) outlooks are cool and wet for much of the country. The northern Plains are dry in both forecasts.

The dollar is the highest in more than a week following better-than-expected government job numbers for July. Equities also are higher, with the Dow Jones industrials up about 40 points when the crops closed, after the job numbers.

Gold futures are down about $10 an ounce as the dollar gains. Crude oil is up about 54 cents and just under $50 a barrel.

Exports – USDA, Reuters:

-       India bought 300,000 metric tons of Ukrainian wheat for September-October delivery. India has had to import wheat this year and last year to address a shortfall in domestic supplies.

-       Russia said it exported 11.4 million metric tons of wheat from January to June, up 22% from the year ago period.

-       Bangladesh seeks to buy 50,000 metric tons of optional-origin wheat. The deadline for offers is Aug. 17, with shipment 40 days after deals are signed.

-       Iraq tenders to buy 50,000 metric tons of wheat from the U.S., Canada or Australia. The tender closes on July 31, with offers remaining valid until August 6.

Corn closed about three cents higher on light end-of-the-week positioning, but lower for the week.

Weather maps show a lack of threatening weather through the weekend and next week, which should aid seed development.

CBOT’s estimated volume for Friday was 257,134. Thursday’s actual volume was 430,624. Open interest in Thursday’s weak market increased by 20,058 with September’s down 5,036 and December’s up 16,890.

September corn settled up 3 at $3.66-1/2 and new-crop December up 3-1/4 at $3.81.

What to Look For: Attention next week will be on the August 10 USDA report. Farm Futures expects a reduction in 2017 production (13.62 billlion bu vs USDA July’s 14.255 billion) and in ending stocks (1.884 billion vs USDA July 2.325 billion).

Soybeans closed lower for the day and week with new-crop November at a one-month lows and below key moving averages.

The favorable weather and a slowdown in exports have made it hard to be bullish. Harvest is beginning in the south with Louisiana about 2% done as of Sunday. In the Midwest, soybean seed development will occur in August and the cool weather should help.

Other oilseed markets stayed higher. Winnipeg canola for November closed higher as traders prepared for a three-day weekend with the markets closed on Monday for Civic Day. The November was up 0.6% at the equivalent of $8.98 a bushel. Europe’s rapeseed  for November was up a little at $9.86.

CBOT’s estimated volume for Friday was 162,000. Thursday’s actual volume was 244,317 and open interest in the lower market decreased by 4,446 with August’s down 706, September’s down 1,363 and  November’s down 6,362.

August soybeans closed down 1-1/4 at $9.49-1/4, September slipped 1-3/4 to $9.52-1/4 and new-crop November dropped 3-3/4 to $9.56-3/4.

What to Look For – Farm Futures expects next week’s USDA report to cut 2017/2018 ending stocks to 415 million from USDA’s July 460 million due in part to expected lower production of 4.214 billion vs 4.26 billion.

Winter wheat finished lower and spring wheat higher, but all three are lower for the week.

Weekly export sales were disappointing and Russia said its wheat exports for the first half of 2017 were up 22% from a year ago.

Spring wheat areas had a few showers overnight but are expected to be dry next week as that harvest advances.  Harvest was under way in the Red River Valley but was still a few days away in western North Dakota. USDA on Monday said 9% of the spring wheat was cut, which matched last year and the five-year average.

The CBOT estimated Friday’s SRW volume at 98,569. Thursday’s actual volume was 123,648. Open interest in Thursday’s lower SRW market decreased by 2,781 with September’s down 2,550 and December’s down 585. KC HRW actual volume for Thursday of 60,289 was up nearly 8,700 from Wednesday. Open interest increased by 1,436 in the lower market.

Chicago’s September SRW wheat closed down 3 at $4.54-3/4. Kansas City’s September HRW slipped ¼ to $4.59-1/2. Spring wheat for September rose 3 to $7.16-1/4.

What to Look For – In the August 10 USDA report, Farm Futures expects 2017/2018 ending stocks lowered to 865 million from USDA’s July 938 million. Farm Futures has all wheat production at 1.719 billion bushels vs USDA’s July 1.76 billion.

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