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Rain = New Crop Futures Under Pressure
Soybeans put in a choppy trade session today as new crop came under pressure while the old crop beans caught a bid. Old crop beans found support from the cash market as it is still trading over $1.00 than the August futures price. With the August contract going off the board on the 14th of the month, it looks like the futures are going to try to work higher to meet cash instead of cash coming back to futures.
New crop futures came under pressure as rain makes grain mentality was seen as the radar continues to show decent rain falling in MO and Southern and Central IL today. Rain that has fallen so far this week has hit some of the driest areas of the Southwestern Corn Belt and notable improvements in soil moisture should be seen.
Drew Lerner of world Weather Inc. described the forecast this way:
Rain during the past couple days and additional rain during the next week from the southwestern Corn Belt into southern Illinois and western Kentucky should lift soil moisture enough to ensure favorable conditions for crops and high yield potentials into at least late August. Favorable conditions for crops and very high yield potentials will continue through the next two weeks in the part of the Midwest between the northern areas that are expected to dry down during the period and the southern areas mentioned above that have seen relief from dryness this week
The weekly old crop bean sales came in at a positive 94.5 tonnes. This puts total commitments at 1.695 billion bushels for the year. In July, the USDA projected old crop sales at 1.620 billion bushels so we are now above the USDA’s export target which means that there is a good chance the USDA will adjust their export number by 10 million next week.
New crop sales came in at 1.003 mmt which was at the low end of the trades estimate. New crop sales are now at 625 million bushels. Soymeal sales continue to stay strong as old crop sales came in at a 18 week high at 252k tonnes. Total commitments for the year are now 10.336 mmt just shy of the total years sales target of 11.650 mmt. New crop sales came in at 479 mmt. We have now sold 4.143 mmt of soymeal for the 2014/2015 marketing year, a record high.
With the bulk of the Midwest seeing decent August rain we continue to very price rallies as opportunity’s to sell.