- Chicago weakens on harvest pressure and slowing export demand; NOPA September crush was record large; S American weather forecast favourable.
- Chicago futures are lower with cash related selling by the farmer helping to refill the cash pipeline. Exporters are disappointed with early soybean seed quality and are raising basis bids for N Midwest soybeans to blend with poorer Delta/S Midwest beans. Otherwise, Central US cash markets are weak with Central IL cash corn bid at -$0.15 while Des Moines is -$0.42/bu under and Toledo is -$0.35 under December futures. The corn harvest is of high quality and the abundance of supply is weighing on basis.
- We maintain that storage tightness will force a greater supply of the 2024 crop harvest to be sold across the scales, but that soybean processors and ethanol producers will be more strongly bidding for supply by late November.
- US soybean futures will show greater weakness as China’s demand for US December soybeans is nearly filled. China does not want to secure January forward soybeans amid the uncertainty of US tariffs. China is active in using the Chicago break to secure February-May Brazilian soybeans. Downside price targets are $3.96-4.00 basis December corn, $5.60-5.65 December Chicago wheat and $9.50-9.65 basis November soybean futures.
- Chicago brokers estimate that managed money has sold 3,600 contracts of wheat, 8,400 contracts of corn, and 6,300 contracts of soybeans. In the products, fund managers have sold 3,500 contracts of soymeal and bought a net 2,800 contracts of soyoil.
- FAS/USDA reported that 131,000 mt of soybeans were sold to China for the 2024/25 crop year. And Mexico booked 120,000 mt of US SRW wheat. The purchase of just 2 cargoes of US soybeans following a long US holiday weekend was a disappointment. US exporters advise that China is stepping up its purchase of Brazilian new crop soybeans from February onward on the morning Chicago break.
- For the week ending October 10, the US shipped out just 16.9 million bu of corn and 13.6 million bu of wheat. Soybean exports were much stronger at 57.9 million bu. For their crop years to date, the US has shipped out 185.7 million bu of corn (up 29 million or 18% from last year), 330 million bu of wheat (up 82 million or 33%), and 188.5 million bu of soybeans (down 14 million bu or 7%). The early US soybean and corn export pace is lagging early season hopes.
- NOPA members crushed 177.3 million bu of soybeans in September, a record and up 7.2% from last year. US soyoil stocks dropped for a sixth consecutive month to 1.066 billion pounds, down 3.8% from last year despite the record September crush rate. The low in US soyoil stocks is normally forged in October with a recovery in stocks during November/December. US soyoil stocks at 1.066 billion pounds on September 30 were the lowest since November 2014.
- The midday GFS weather forecast features a mixture of rain/sunshine for 2024 spring seeding across Brazil/Argentina. Additional rain is falling at midday for NC Argentina/S Brazil with totals of 0.5-2.00” being reported. The rain is causing farmers to rush seed into the ground.
- Northern Brazil will see daily showers for the next 2 weeks that will adequately raise soil moisture to near normal. It is a process, but the forecasts are consistent with near to above normal rainfall and near to below normal temperatures into November. And the coming dry slot for Argentina will allow farmers to seed first crop corn/soybeans with the yield risk being later this year due to La Niña from February forward. Argentine farmers will be more aggressive with first season corn and soybean production vs prior years.
- US producer selling of cash soybeans is noted as farmers nearly complete their harvest and push the extra supply across the scales. But the big worry is slowing Chinese demand for US soy amid the potential for record large S American production. The US and Brazil look to harvest back-to-back record large soy crops. December corn is nearing support at $4.00 while December Chicago wheat is in the middle of the trading range. After a sharp break, look for consolidation with hedge selling expected to close the week.