By admin       2018-07-14

The bulls posted another win this week – this time in impressive fashion – with the Dec contract picking up 339 points to finish at 87.84. The Dec – Mar spread was near unchanged on the week, inverted at 22. Market action this week was undoubtedly heavily influenced by bullish revisions to USDA official S&D balance sheets. We said in this space last week that we thought the July WASDE report had more bovine potential Vs grizzly; the magnitude of the bullish effect was significantly greater than we had imagined it could be.With respect to CME grains, updated corn data was bullish with both domestic and world projected ending stocks for 2018/19 reduced 2% Vs June and with the aggregate world projected stocks-to-use ratio at the tightest in a quarter century. Wheat data was supportive at the aggregate world level, less so at the domestic level. Updated new crop projections for soybeans were out and out bearish.Both the longer-term S&D scenarios for cotton and soybeans have us thinking if cotton infrastructure will require significant enhancements prior to the autumn of 2019.In its July WASDE report, the USDA notably reduced its projection of aggregate world and domestic ending stocks for 2018/19 to approximately 77.84M and 4M bales, respectively. Projected carryout outside of China was reduced modestly Vs June to 38.62M bales while China’s ending stocks were projected nearly 5M bales off figures proffered within the June report. World consumption was projected noticeably higher Vs June at a record of nearly 127M bales while production was projected almost 300K bales lower at just above 120M.

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