. Corn futures closed fractionally higher today in a 3 cent trading range. Weakness Monday and Tuesday has given way to a sideways trade the past two sessions with CZ down roughly a nickel so far this week. Funds continue to hold an estimated short position of 125,000 contracts, waiting to see whether or not to add to or cover this position as harvest unfolds and more yield results become available. Harvest activity should pick up this weekend but it may be in the bean patch as corn is not drying to producer’s satisfaction in spite of the July type temperatures in much of the Midwest. (Tomorrow is the first day of Autumn!) Weekly export sales were a disappointing 20.7 mln. bu. with Japan and Mexico, as usual, the only buyers of note. YTD export sales commitments stand at 434 mln. bu. vs. 707 mln. bu. at this time last year. Brazil and Argentina continue to offer corn at cheaper values than the U.S. and is expected to continue through harvest. This was known before harvest but with better yield projections to go along with this corn basis is currently stagnant at best.
Soybeans closed fractionally higher in a 10 cent trading range today – a lot of work for not much change. Soybeans are chopping sideways and have gained roughly 2 cents so far this week. Funds are holding near even to slightly long (currently estimated: 5,000 contracts.) Good export demand continues to support soybeans as we continue to see daily announcements of beans sales - this morning another 132 tmt sold to China. Next week’s export sales report should be impressive. This week’s export sales report came in above expectations at 86.0 mln. bu. and brings YTD commitments to 710 mln. bu. This is 187 mln. bu. below last year’s level at this time but the gap is narrowing. PNW soybeans are the cheapest source for China and NOLA beans are competitive with S. America. Also supporting soybeans is dry weather in northern Brazil being at least somewhat worrisome. This could also be a problem for their second corn crop as well but it is too early for concern – it just bears watching. Brazil is expected to increase bean area by 2% in 17/18.
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