Good Morning,

Markets were steady overnight with corn up 1 and soybeans up 3 despite news of more sanctions against China. The US announced it will begin collecting 25% tariffs on an additional $16 billion in Chinese imports on Aug 23.
Traders appear content to remain neutral heading into Friday’s report where they will get a state by state estimate of this year’s crop. The average trade guess for yield is 176 bpa with a range of 171-180. Ending stocks are expected to rise from 1.552 billion to 1.636 billion bushels. The average trade guess for soybeans is 49.6 bpa with a range of 48-51.5. Ending stocks guesses average 638 million bushels up 58 from July.
New crop demand is where I am looking for the markets to get help. With lower corn production in South America and the Black Sea region, the US is going to have to cover the world’s production shortages. I believe soybeans will get their support from increased demand as importers come to the US for the cheapest beans on the market despite tariffs. The challenge in both commodities will be the timing of any market rally. Producers that are in need of cash flow or space constraints may not be able to capture any rally we may see. My advice would be for all producers to look at making some cash sales ahead of Fridays report and look to lock in basis sales for new crop corn. (October forward) If we see the CBOT rally, we are guaranteed to see basis depreciate like it has the last two years with adequate carryout.

Have a Safe Day!

Garry Gard