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Energies were lower overnight on the latest predictable weekend headline of “peace” talks in the Middle East.
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Grains were lower as we start the last month of the summer quarter. Seasonally, weather should move center stage, but I don't think it means what it used to.
Morning Summary: I sat at my desk for quite a while pre-dawn Monday before opening my quote screen. Once I click that button, even though I looked at Sunday night’s markets, the week starts rolling on the same old track it has gone time after time ad infinitum. Part of me wonders how we got on this ride, but then I remember that I actually know. The whole world knows. But anyway, it’s time to check markets. The US dollar index was quietly lower. (Okay, nothing to telling with that.) Metals were in the green across the board, led by a 1% rally in silver. Energies were still lower, but as I talked about last night, contracts were off initial session lows. (Our old friend the Widow Maker, aka Natural Gas, was in the green to start the day.) A check of the headlines and it is what we would expect, “Oil prices fall more than 5% as Middle East tensions ebb on diplomatic efforts”. Has anything changed? Of course not. At least those who subscribe to the US president’s media site, at $100,000 per month, made money this weekend. As Metallica told us long ago, “and nothing else matters.”
Corn: The corn market was in the red to start the day, week, and last month of the summer quarter. With the Goldman Roll set to begin this coming Friday, a look back at the latest Commitments of Traders report (legacy, futures only) shows Watson added a whopping 67,670 contracts to its net-long futures position the positioning week ending Tuesday, July 28. For the week, the September issue closed 5.75 cents higher after gaining as much as 11.5 cents based on daily closes only. As for December (ZCZ26), it finished the positioning week with a gain of 5.25 cents after adding as much as 12.25 cents. However, since last Tuesday’s close, December is down 18.0 cents indicating Watson has been selling. Why? The silly part of my brain wants to say it’s because of fundamentals, even though the rest of my mind knows better. Recall the December-March futures spread closed last Friday covering 53% calculated full commercial carry while the Dec-July forward curve covered 41%. Both numbers are still neutral, but when compared to the previous Friday’s settlement of 51% and 36% respectively we see the commercial side is growing more comfortable with the US 2026 crop production potential. Monday’s forecast shows most of the US Midwest missing out on rain to start the week.
Soybeans: Given the manipulated selloff in the Energies sector, it stands to reason the oilseed sub-sector was in the red across the board pre-dawn. The spot-month distillates contract (diesel fuel) was down 12.0 cents (2.9%) at this writing after falling as much as 13.33 cents shortly after the open Sunday evening. November canola is down $10.40 (1.4%) after falling as much as $14.60 while December soybean oil is off 0.2 cent after dipping as much as 0.8 overnight. Soybean meal is quietly lower with the more heavily traded December issue down $2.50 (0.8%) to start the day. As for soybeans, the first Jar Jar Binks contract (August) has moved into delivery, leaving the second issue (September) to be discussed for another month. I’ll skip ahead to November (ZSX26), the issue sitting 7.0 cents lower after sliding as much as 12.25 cents into the red overnight on trade volume of 23,000 contracts. The latest 6-to-10-day forecast, for August 8 to 12 called for both above normal temperatures and precipitation for much of US Plains and Midwest. While these are numerical statistics that can be plugged into Watson, those who understand August is the “Dog Days of Summer” know ‘above normal’ precipitation could be nothing more than a morning dew.
Wheat: The wheat sub-sector was also red across the board early Monday morning, though I don’t see much to get excited about. For the most part, wheat is in its off-season between summer harvest and fall planting of winter crops, leaving the lightly traded spring wheat market in the spotlight as this year’s harvest continues. Recall from last week, in its finite wisdom, NASS pegged winter wheat harvest at 81% complete with spring wheat making its initial mark at 2%. At look at the board shows both the September (MWU26) and December issues down 2.0 cents to start the day on trade volume of 370 contracts and 310 contracts respectively. Monday’s forecast calls for possible rains across the HRS growing areas from western Montana through Minnesota. A look at this morning’s radar shows the storm system already forming and rolling across the area pre-dawn. Last Friday saw the September-December futures spread close at a carry of 24.75 cents and cover a bearish 79% calculated full commercial carry while the Dec-March settled at a carry of 16.5 cents and covered 54%. Similar to corn, it would not be surprising to see a Down Escalator Simulator develop in spring wheat.
On the date of publication, Darin Newsom did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.