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We kickoff the day with Consumer Inflation Expectations and Export Inspections at 10:00 A.M., 3-Month & 6-Month Bill Auction at 10:30 A.M., Crop Production, USDA Supply/Demand, and WASDE at 11:00 A.M., Monthly Budget Statement at 1:00 P.M., and Crop Progress at 3:00 P.M.

Manage funds on Tuesday were net short 42000, contracts of corn, soybean, and Chicago wheat combined. Fund’s short in corn was 242,000 contracts down 53,000 from the prior week and a bit smaller than expected. Fund’s short in Chicago wheat was 71,000 contracts down 7,000 from the prior week and right at expectations. Funds short in soybeans was 169,000 contracts, down 10,000 from the prior week. Ag Resources (ARC) estimates since Tuesday managed funds have added 25,000 contracts to their major ag short positions, with funds’ net short in soybeans projected just 6,000 shy of mid-July’s record. The structure of the market poses risk to any/all even modestly bullish shockV-bottom and tops are often formed in speculative positioning. USDA’s August WASDE is key. Expectations are for sizable US corn and soybean end stocks today.

CBOT Corn Ended Slightly Lower on MO/IL Precipitation Forecast; Ukrainian Fob market Rallies Again: Corn markets did little on the last full session before the release of USDA’s Aug WASDE. ARC maintains a longer-term demand driven recovery lies in the offing, but the starting points hinges upon NASS’s Aug corn yield and then PRO FARMER’S tour results. Acreage is important and assuming the loss of 1Mil Acres = which is routine from June to Final – even a 183-184 yield limits stocks building in 24/25 quarterly stocks will be large, but its difficult to be bearish corn below $4.00 Dec given the US’s position in the world market. Notice nearby Ukrainian fob offers exist a full $1.45 above CBOT futures. This is rare and underscores the lack of Black Sea corn. The upside is pegged at $4.40-$4.70, Dec prior to expiration, but crop size must be better known before a lasting recovery occurs. Argentina needs rain prior to early planting in mid-September. Today is a key data point.

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On the Weather Front, Potential Tropical Cyclone Five: The disturbance is expected to become a tropical storm before or as it reaches the Leeward Islands, where Tropical Storm watches are in effect. Tropical storm conditions could begin on Tuesday for portions of the area. Heavy rainfall may result in locally considerable flash flooding and mudslides in areas of the Leeward Islands by later today into Wednesday, and over Puerto Rico late Tuesday into Thursday. A Tropical Storm watch has been issued for Puerto Rico and the nearby islands. Additional watches and warnings will likely be required for portions of the northeastern Caribbean later today. The cone is turning northward and back out in the Atlantic and Bermuda is right in the path that could gain hurricane strength and named Ernesto.

Nearby Forecast Wetter in MO/IL, Drier in KS; August to be the story of Haves & Have Nots: The EU and GFS models agree that welcome heavy rainfall lies ahead for NE, MO/IL and southern IN tomorrow into Friday while net drying persists in ND, Upper Great Lakes and Delta/Southeast. This pattern of scattered/regional rainfall is likely to persist into late month and ARC maintains that extended range details will be changeable as the tropics become more active. The next tropical storm/hurricane is forecast to move into the Atlantic Aug 16-17. NOAA’s 7-day precipitation outlook is a agreeable. Abnormally cool temps continue in all but the far Southern Plains into August 14^th . Overnight lows will drop into the low 50’s across N Plains/Upper Midwest Sat & Sun mornings. A warmer temp pattern evolves thereafter. The coming rain in MO, IL/S IN brightens yield prospects there. Lingering dryness in KS and OH are partially offsetting. Midwest heat returns after August 16.

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