-Decent weekend rains and more in the forecast weigh on corn
-SBO strength continues to support soybeans
-USDA announces modest new crop soybean sales to China
-Funds less short in corn than expected
-Malaysian labor shortage impacting palm oil production
-China allocates funds for hog industry rebuilding
Decent weekend rain and several events expected over the next week or so providing widespread coverage weighed on corn prices overnight. Ideas on crop conditions this afternoon are mixed, but there’s little doubt the rains of late should help stabilize, if not improve, conditions moving forward. Soybean oil was strong again overnight following strength in palm oil (now at a 5-month high), supporting soybeans, as well.
 Safras & Mercado sees next year’s Brazilian soybean planted area rising by 1.8% to 37.8 million hectares (93.4 mil acres), prompting an expected increase in production to 131.7 MMT from their estimate of this year’s crop of 125.0 MMT. USDA is currently estimating next year’s crop at 131.0 MMT and this year’s crop at 126.0 MMT. Safras expects next year’s total corn area to rise 1% to 19.66 mil hectares (48.6 mil acres) for total production at a new record of 116.0 MMT vs this year’s 107.3 MMT. Their corn production ideas are notably above USDA estimates, with this year’s crop at 101.0 MMT and next year’s at 107.0 MMT.
 China’s National Development and Reform Commission (NDRC) has allocated $650 million from the central budget to increase the hog industry’s recovery, with funds being provided to large-production counties for a wide range of initiatives such as building new facilities, improving epidemic prevention, waste handling systems, automatic feeding systems, etc.
ï‚· USDA reported the sale of 132k tonnes of new crop, 2020/21, soybeans to China this morning.
 Friday afternoon’s CFTC Disaggregated COT data for futures/options combined for the week ended 7/14/20 showed funds being net buyers in corn of 8.1k contracts to reduce their net short to 134k contracts. Wire service daily tallies of estimated fund activity for the period included in Friday’s CFTC report implied funds were net sellers of around 50k contracts. Oops. Accordingly, funds are much less short than many have believed. Funds were net buyers of 25.2k contracts in CBOT wheat to reduce their net short to only 8.3k contracts and were net buyers of 9.1k KCBT wheat, now net short 23.6k. Funds were net sellers of 3.3k contacts in soybeans to reduce their net long to 66.0k, sellers of 8.5k SBM (net short 30.5k) and sellers of 9.2k SBO (net long 10.2k).
ï‚· New crop Ukrainian wheat prices rose $4/tonne last week to $205-$209 fob Black Sea according to APK-Inform.
ï‚· The Malaysian Palm Oil Association said a severe labor shortage, largely due to COVID-19, is resulting in considerable reductions in palm oil production capacity of 10-25% as harvesting of bunches is reduced. Concerns are rising, as well, as the seasonal peak production period starting in September approaches.
ï‚· Saudi Arabia bought 725k tonnes of optional-origin feed barley for Oct-Nov shipment as a result of their recent tender, paying an average price of $211.43/tonne c&f.
 Malaysia plans to file a case with the WTO over the EU’s restrictions on palm oil usage in biofuels by the end of the year.
 Egypt’s wheat storage capacity is now more than 4 MMT, having added another 10% since the end of 2019 when capacity stood at 3.6 MMT, amid ongoing silo-building initiatives.
ï‚· Taiwan tendered for 98k tonnes of U.S. wheat.
Weather
Weekend rains were in two batched. Fri-Sat saw .50-1â€, with some 1â€+ totals, for most of MN, WI and far northern IA with .30-.80†across SW IA. On Sunday, rains of .50-1â€+ were seen for around 50% of IL and far SW IN, with totals of .35-.85†in the rest of IN and southern OH (see map on page 2). The weekend cold front will push south into the southern ½ of the Midwest and stall out for the week. This will allow showers and thunderstorms to pop up across areas generally south of I-80. While there isn’t much organization to the rains, totals by Friday look to be in the .50-1†range, with some isolated heavier totals, and coverage of near 100% to the south of I-80, with north of I-80 sees generally less than .40†and coverage around 50%. The 6-10 day period sees the bulk of the rainfall activity to push back to the north and impact areas generally north of I-80, with totals for the period of .50-1â€, isolated to 1â€+, and coverage of around 75%. Rainfall to the south of I-80 looks to be in the .25-.75â€
range, with coverage of around 50% and most pronounced across IN and OH. The 11-16 day period sees the ridging in the 6-10 day period to continue into most, if not all of this time frame. The European does flatten out the ridge by late in the period, bringing rains and cooler temps. The GFS keeps it fairly strong through all of the period. Temps will run close to average for the week ahead, perhaps even a bit below the further north and west. The 6-10 day sees temps to run average to a bit above, but no severe heat.