- Chicago soy extends overnight on absence of daily export sales; GFS weather forecast wetter in US Central Plains; Crude down sharply.
- Chicago ag futures at midday are mixed, with wheat higher and row crops lower. The next two sessions will be defined by adjusting risk ahead of NASS’s corn and soy objective yield data. We expect USDA’s Sep WASDE to be lacking in statistical fireworks, but there is a battle between August dryness, disease pressure, rapid maturation but also above-average crop ratings. We maintain price choppiness is most probable until the US corn and soy harvests reach 20-25% complete. Combine data is critical this year. It is only when soy crop size is better known that a bottom in Chicago soy futures can be confirmed. WTI crude at midday is down $3.10/barrel at $65.60.
- FAS’s daily reporting system was void of new export demand, which has compounded long liquidation in the soy complex. Weekly soy export sales of 45-50 million bu are needed throughout autumn to validate USDA’s annual 2024/25 US export forecast of 1,850 million bu.
- We expect soy purchasing from China and others to stay active into the holiday season as Brazilian beans don’t materially compete with US origin until January, but the USDA’s Sep WASDE will act as a reminder that US soy end stocks exceed 550 million bu without S American supply dislocation.
- Other breaking news is absent. Argentine company Biocere’s HB4 GMO wheat variety won’t be available in the US for at least two years, and then the issue globally is one of consumer preference. This will be a challenge. Algeria is seeking 160,000 mt of optional origin corn for autumn delivery. Wheat cash basis levels in W Europe steady. Cash corn in Ukraine is unchanged. Fresh input is being sought, but it is the USDA’s Sep WASDE that matters most.
- The midday GFS weather forecast is consistent in keeping S American rainfall into Sep 24 isolated to Rio Grande do Sul and Santa Caterina and southern Parana (25% of soy total production) in far southern Brazil. A pattern of complete dryness persists elsewhere, while abnormal heat stays in place across central and northern Brazil. Max temperatures in Mato Grosso do Sul, Mato Grosso, and Goias will be 100-103 each of the next 10 days, with heat alerts there widespread. The market is rightly not concerned about S American weather today, but there is no doubt a change is needed prior to Oct 1 to facilitate Brazilian soy exports in the second half of January. Wheat in Argentina is most exposed to weather currently.
- In the US the GFS weather forecast is much wetter across the Central Plains and W Midwest after Sep 18. The GFS forecast projects a sweeping cold front to travel across the W US Sep 18-20, which produces rainfall of 2-4” in OK, E KS, NE, and parts of IA/MN. Confidence in GFS details is low, but there has been consistency in advertising better rain chances across the C Plains in the second half of September. Hurricane Francine’s path is unchanged, with soaking rainfall due in LA, MS, and W TN over the next 72 hours. The E Plains and Great Lakes region stays arid. There are still no signs of frost in the Dakotas/MN.
- It is a low volume/low input session, with negative macro sentiment spilling into ag markets. Corn and wheat have very likely scored seasonal bottoms, while whether NASS pegs US soy yield above or below 53.5 determines soy complex direction through the balance of September.