Morning Comments/Roy's (RJ O'Brien)

Morning Grain Comments - August 12,  2022

USDA monthly supply and demand report will be out today at 11:00 a.m.
CORN:  Its USDA Crop report day!!  Choppy 2-sided trade in corn overnight as market waits for the 1st US production estimates of the season from the USDA.  Most trade estimates hovering in the 175-176 so anything above 175 would be seen as a letdown after this 45 cents/bu rally.  A sub 175 corn yield will be seen as supportive to the trade and focus on how weather does for finishing the crop.  The weather maps are still in disagreement about the rains in the WCB through next Sunday.  The Euro model has the dry areas of WCB getting some much-needed moisture while the GFS model keeps those areas dry and the rains east of I-35.  The Euro model has tracked better lately.  French corn conditions continue to tumble, down another 9% to 53% G/E.  This is the lowest G/E score since 2011.  Argentine corn harvest is almost 90% complete.  Corn harvest underway in the US South though the heavy rains forecast over the next 10-14 days will slow progress.  Midwest corn basis levels continue to tumble with some locations down almost $1.00 in the last 10 days.  The transition from old to new crop values are always messy in years of inverses.  Strap in for today's report.
WHEAT:  Wheat is lower this morning with European values slightly lower.  Trade will be focused on US spring wheat production and total wheat production.  Avg trade guess on spring wheat at 510 mln bu vs 503 mln bu in the USDA July report.  All wheat trade estimate of 1.791 bln bu vs USDA July at 1.781 bln bu.  Export news is quiet this morning.  Some chatter of some importers trying to switch cargoes from French to Russian origin due to softening Russian prices.  Some weather maps have good rains for the southern HRW areas next week, which would help with getting plantings established.  Support for KWU at $8.60 and $8.40. 
SOY-COMPLEX:  Soybeans and soy oil are lower this morning in front of the USDA report.  Avg trade guess on yield is 51.1 vs July USDA of 51.5.  A number above 51.5 will be seen as bearish and sub 50.5 bpa will be seen as bullish.  Support for SX at $13.60 and resistance at $14.90-15.00.  Soy oil seeing some pressure overnight with softer energies this morning.  China lowered their 2021/22 soybean import number by 1.98 mmt to 91.02 mmt after heavy losses in the pork sector reduced demand for soymeal.  US weather maps showing ECB should have good moisture for pod fill to finish out August.  WCB remains a question mark on the moisture.  Soybean basis was down 20-50 cents in parts of ECB though bids range from +30X to +220X yet....just depends on the crush plant.  Same thing in the WCB as some plants trying to bridge the gap to new crop.