july ’21 july ‘21 · 2020. 7. 31. · mar $3.40 $0.1600 jan $9.00 $0.2675 may $3.50 $0.1750 mar...

This communication may contain confidential and/or proprietary information and is intended only for the use of the individual or entity to which it is addressed. If the reader of this communication is not the intended recipient, you are hereby notified that any unauthorized dissemination, distribution, and/or use of this communication is strictly prohibited. The information contained herein is accurate to the best of our knowledge and belief. This report and any views expressed herein are provided for information purposes only and should not be construed in any way as an inducement to buy or sell. Farmward Cooperative does not accept any liability for any loss or damage howsoever caused to anyone trading in reliance upon such information. Any prices indicated are subject to change with market conditions.

What you need to know for the week ending July 31, 2020 • The unseasonal improvement in corn and soybean conditions reported on

Monday afternoon put the markets in a negative mood this week to the

point that even a record corn sale to China couldn’t spur a rally. We move

into August with silking and pod setting both 7% above average pace and

weather forecasts calling for cool temperatures until at least mid-month.

This afternoon’s 6-10 day forecasts trend warmer than yesterday’s maps, but

also shift above normal rainfall directly over Iowa and into the Eastern Belt.

The 8-14 day maps look a little warmer. The weekly drought monitor shows

63% of Iowa at least abnormally dry, not considering parts of western Iowa

that received needed rainfall early this week. Those areas of Iowa will still

need rain, but cooler temperatures are viewed as positive by the market and

should prolong the grain fill period if realized. Notable corn condition

improvements this week were Illinois (+11%), Nebraska (+9%), Indiana (+6%)

and Ohio (+6%) while Iowa declined 3% to 77% good/excellent. Iowa was

reported 87% silking and 23% dough stage as of Sunday as well as 50% of

soybeans setting pods statewide.

• Technically, September corn broke its contract low of $3.15, trading as low

as $3.14 ¼ this morning. July futures traded as low as $3.09 before their

expiration, leaving that mark as next support. Resistance sits overhead

around $3.29 where the 20- and 50-day moving averages converge.

December corn did not test its contract low of $3.22 yet, closing 5 cents

above that mark today. Resistance sits in the $3.38 area. Corn is oversold

according to the slow stochastics while soybeans are considered neutral.

November soybeans held the 38% retracement level of $8.81 ½ but couldn’t

close over the 20-day moving average of $8.93.

• We’ll see our first yield report of 2020 on August 12, a week from

Wednesday. The August yield is determined by USDA weather and

conditions models, while future reports factor in producer surveys as well.

Seasonals point to lower prices ahead if the crop stays large, as August

through early September have been statistically likely times to post annual

lows.

• China made its largest U.S. corn purchase ever on Thursday, buying about 75

million bushels of new crop corn, beating its previous record purchase set

just 2 weeks ago. This was the 3rd largest corn sale in U.S. history. USDA has

China importing 7 MMT of corn from all destinations in the 2020/21

marketing year – the U.S. already has about 5.7 MMT (225 million bushels or

81%) of that business booked already. Chinese corn prices are at 5-year

highs. Obviously, cancellations are always a fear with China, but the corn

business is a nice surprise so far. According to Bloomberg, we sold more

soybeans this July than any other July on record and our current new crop

book is at 6-year highs for the end of July. However, with near-record

soybean exports expected by USDA, China will need to continue to come to

the table as the year moves on. The U.S. dollar is at 2-year lows.

• Funds are still around 150,000 contracts net short corn and now sit around

60,000 contracts net long soybeans. It is worth noting that soybean oil

rallied nearly 5% from Tuesday’s low to today’s close, likely lending support

to soybean futures as well later in the week.

Sep ‘20 Dec ‘20

$3.16 $3.27

-$0.10 ¼ -$0.08

Sep ‘20 Nov ‘20

$8.90 ¼ $8.92 ½

-$0.08 ½ -$0.06 ¾

Crop Conditions WASDE Pro Farmer

Crop Tour

SPREADS (From Nov & Dec 2020 Futures)

July ’21

SOYBEANS

July ‘21

CORN

WEEKLY CLOSES & CHANGES

AT-THE-MONEY CALL OPTIONS

CORN SOYBEANS Sep $3.15 $0.0650 Sep $8.90 $0.1025 Dec $3.30 $0.1175 Nov $8.90 $0.2300 Mar $3.40 $0.1600 Jan $9.00 $0.2675 May $3.50 $0.1750 Mar $9.00 $0.2950


USELESS FACT OF THE WEEK

More tornadoes occur in the United Kingdom per

square mile than any other country in the world.


U.S. WEATHER (6-10 & 8-14 DAY OUTLOOKS)


U.S. WEATHER


U.S. WEATHER

14-Day Precipitation (% of Normal)

7-Day Precipitation Forecast


DECEMBER 2020 CORN

TECHNICALS

20-Day Moving Average $3.38 Slow Stochastic Status Oversold

50-Day Moving Average $3.39 ¼ Stochastic %K 4.99%

100-Day Moving Average $3.43 Stochastic %D 4.58%

Contract High $4.24 Next Gap Higher $3.42-3.43 ¾

Contract Low $3.22 Next Gap Lower N/A


NOVEMBER 2020 SOYBEANS

TECHNICALS

20-Day Moving Average $8.93 Slow Stochastic Status Neutral

50-Day Moving Average $8.79 ¼ Stochastic %K 51.93%

100-Day Moving Average $8.68 ¼ Stochastic %D 49.89%

Contract High $10.05 Next Gap Higher N/A

Contract Low $8.31 Next Gap Lower N/A


MANAGED MONEY FUND POSITION

CORN

SOYBEANS

Position

-158,282

Change From LW

-2,606

Position

+59,192

Change From LW

-13,917


NEW CROP FUTURES – 5-YEAR CONTINUATION CHARTS

july ’21 july ‘21 · 2020. 7. 31. · mar $3.40 $0.1600 jan $9.00 $0.2675 may $3.50 $0.1750 mar...

Documents