The Good: The only good news in the ag futures markets today was in the soybean market. Futures closed the day 6.75 cents higher in the nearby contract as overnight sales to China and unknown destinations totalled nearly 700,000 tonnes. Other markets were focussed on the increasing production estimates in North America, while soybeans are temporarily focussed on demand. The soybean crop conditions today increased to 74 per cent good to excellent, so we should expect some downside in the overnight trade.
The Bad: Wheat received more bad news today as the Russian production estimate from IKAR increased by 1.5 million tonnes. Russian and Ukrainian wheat prices are under pressure as the market is assuming more increases are on the way. Funds continued to increase their short positions in Kansas City and Minneapolis markets. Interestingly enough the funds have essentially an even position in the Chicago wheat market. The volatility in the wheat markets continues to push the spreads around with the Chicago wheat and Minneapolis wheat contracts (September) nearly at even money. There has been a significant rally in the Minneapolis – Chicago spread from the lows posted in mid July. The change in the spread is the result of the spring wheat contract losing less than the Kansas City and Chicago markets over the past two weeks.
The Ugly: U.S. COVID-19 cases hit five million one the weekend. The increase in cases from three million to five million has taken just over one month. There is some good news on the COVID-19 front in the U.S. as the number of cases is declining in states that had been increasing rapidly on over the past month. The number of cases is still increasing in some southern and midwestern states which will be the next source of increasing cases. The virus is still on the move.