Market Summary. Commitment of. Traders. Managed Money. Fund Positions

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1 July 20, 2018 The trade monitors were showing a strange green color this week as prices managed to forge a decent bounce after weeks of relentless selling across the ag space. Grain prices managed to shrug off the typical Monday weakness and actually closer higher for the first Monday in 7 weeks. Continuation of the strength was seen all week, specifically spurred by much lower than expected crop condition ratings released Monday afternoon. The biggest declines were seen in MO and MI with the G/E rating down 15 and 11 points, respectively. In fact, the only state to see a WoW improvement was ND, where 88% of the crop is rated G/E. Buenos Aires Grains Exchange cut their 17/18 Argentine corn production estimate another 1MMT this week, down to 31MMT. This would be 2MMT lower than the current USDA balance sheet estimate for Argentina. More weight continues to be placed on the northern hemisphere growing season as SA production ideas continue to dwindle. Tariff talk was much quieter this week. While that s not necessarily a good thing, the market used the quieter week to build a much needed relief rally across the ag space. Reports did surface this week that the US may be working on a separate trade deal with Mexico in lieu of a new NAFTA agreement. The big hang-up with Canada still appears to be the dairy industry, and a separate agreement with Mexico would certainly put extra pressure on Canada to come back to the negotiation table. Export sales this week for corn were 25MM bushels for the 17/18 crop year, which now puts 17/18 MY total export sales at 2.311B bushels. Given the USDA s updated export expectation of 2.4B bushels, sales only need to average 12.7MM bu/week to achieve that goal. For 18/19 crop year, export sales were a stout 30.5MM bushels, which puts total sales for next year at 213.4MM bushels, which is already 64% higher YOY. Market Summary Next week will feature below normal temperatures across the Midwest, with best rain chances for SD, NE, IN, OH, and MI. Wheat and corn continue to have the best fundamental story in the ag space. EU and Russian wheat estimates continue to get trimmed, while Argentina corn harvest has eclipsed the 70% mark. Argentina FOB corn export offers have now risen above US Gulf offers, and should continue to push export demand for autumn/winter to the US. As of: 7/10/18 Long/ Short Inside this issue Weekly Price Change... 2 Drought Monitor Day Precip... 4 Crop Condition Day Day... 5 Exports... 6 Technicals.7 Commitment of Corn Traders Managed Money Fund Positions Soybeans Wheat -129K -58K +3k Change -25K -5K +3K

2 Weekly Price Change: 7/20/2018 Price Change % Change Corn Sep $3.55 1/4 +$ % Soybeans Aug $8.49 3/4 +$ % Wheat Sep $5.16 +$ % Feeder Cattle Aug $ $ % Live Cattle Aug $ $ % WTI Crude Oil $ $ % US Dollar Index % DJIA % 2

3 US Drought Monitor 3

4 7 Day GFS Precipitation Forecast US Corn Crop Condition Overall Corn condition rated 72% GD Excellent compared to 68% last year and 5 year average of 70% Crop rating declined 3% thru this past Sunday due to massive declines in MO and MI. 4

5 6 to 10 Day Forecast Precipitation Temperature Precipitation 8 to 14 Day Forecast Temperature 5

6 Exports Sales Export sales came in 9MM bushels higher week over week to 25MM bushels. This was within the trade guess, but well above the 14MM pace needed to meet current USDA export sales estimates. Export Inspections Weekly export inspections were the lowest we have seen in the past 16 weeks, coming in at 48MM. This well below the inspection pace necessary to meet the USDA 2.4B export estimate. However, at this point it would appear that census data is a more accurate representation of exports as the census is running about 150MM bushels ahead of the inspections pace. Given that difference, we estimate the U.S. needs to exports roughly 46MM bushels per week. 6 6

7 Technical Analysis The weekly Dec corn chart is showing the first green candle in 8 weeks. In fact, corn managed a positive close all 5 days this week. Friday s close is right at the 23.6% fib retracement of May s high to last week s low,. The next major resistance would be the monthly high at $3.74, followed by the 38.2% fib retracement at $3.80. Both stochastics and MACD appear to have found a short-term bottom as well and could have a positive cross next week if momentum continues. 7