- Chicago futures are mixed at midday in declining volume from the overnight trade. Corn futures are mixed to lower while soybeans/wheat hold in the green. The volume of trade has subsided to routine activity. China secured additional US corn/soybeans which was reported by FAS which underpinned early activity. US corn prices are sliding on the sell the fact profit taking. We hear that China has booked another 3 cargoes of US soybeans and 5 cargoes of Brazilian soybeans this morning. The Brazilian purchases are interesting as China pushes its demand southward for LH January/February on price.
- Cash selling from the US farmer is more robust as soybeans push above $10.00/bu November. US farmers will be more anxious to reward rallies when they have a good idea on yield prospects. The spread between November/March soybeans is just 2 cents, so there is no good reason to store soybeans. Once the harvest starts, we look for US farmers to be more active sellers based on the futures spread relationships. Cash basis levels are also staying stout for US soybeans for Sept-October delivery to fill Chinese orders.
- NASS is not expected to produce any market fireworks with their Weekly Crop Progress Report this afternoon, which could produce a turnaround Tuesday. US corn/soybean good/excellent conditions will hold steady or slide 1% with actual harvest reports helping to determine future condition ratings. Some 4-6% of the US corn crop is expected to be harvested this afternoon.
- Chicago floor brokers estimate that funds have bought 3,600 contracts of soybeans and 1,200 contracts of wheat, while being flat in corn. Funds were active booking corn overnight and then selling in back in the day session. In soy products, funds have bought 4,900 contracts of soyoil and sold 2,200 contracts of soyoil. The surge in palmoil futures has underpinned Chicago soyoil futures.
- For the week ending September 10, the US exported 34.6 million bu of corn, 47.2 million bu of soybeans, and 23.4 million mt of wheat. The wheat export loadings were larger than expected with a cargo heading to China out of the PNW while Brazil also loaded out a cargo from the Gulf. China took 2 cargoes of US corn from the Gulf and 31 million bu of soybeans in total (20.5 million mt from the Gulf). The heavy rains that are coming from soon-to-become hurricane Sally are likely to slow NOLA grain/soy loadings this week.
- For their respective crop years to date, the US has loaded out 297.6 million bu of wheat (up 21 million or 7%), 45 million bu of corn (up 10 million) and 68 million bu of US soybeans (up 23 million). The Chinese demand looks to underpin US corn and soybean shipments in the weeks ahead as a large export program is underway.
- The midday forecast is almost completely unchanged from the morning run. Hurricane Sally will work across the far Southeastern US into the coming weekend. Near complete dryness and relative warmth occurs elsewhere. The GFS forecast allows light shower activity to return to IL, IN and Ml Sep 23-24, but confidence in this is low. Other forecasting models maintain Midwest dryness into the end of September.
- The Midwest harvest is dead ahead for a US corn crop that is the second largest on record with soybeans being the third largest. The market structure calls for US farmers to sell soybeans off the combine into the cash market. September futures expire today which has been a supportive element to the market in recent days. China crushers are becoming active in booking Brazilian new crop soybeans at sizeable discounts to the US Gulf. The key question for Chicago is when Sinograin will be finished securing its soybeans for China’s reserve. Higher prices in soy hinge on ongoing large Chinese buying. China booked 456,000 mt of corn and 129,000 mt of US soybeans this morning on a known basis. There was also another 318,000 mt of US soybeans sold to an unknown destination, which is expected to be China.