- Soybeans/soyoil pull back from early rally effort; GFS weather forecast run delayed at midday; EU members vote to delay EUDR for a year.
- Chicago futures are mixed at midday with the grain futures firm, while soybean and soyoil futures sag. Corn futures are supported by a large 1.6 million mt daily US corn export sale to Mexico (rumoured to be for their corn syrup bottled drink industry) while soybeans sag on reports of China securing additional Brazilian soybeans from February forward while US Gulf exporters seek to blend off poor quality soybeans that are either splits or previously germinated that are being sourced from the S Midwest/Delta. Midwest basis bids are firm as exporters seek N Midwest supply to “blend off” the poor S Midwest/Delta soybeans which has rallied the November/January soybean spread.
- China is booking US soybeans for shipment through December. However, they will completely switch to Brazil for January until more is known about the November 5 US Presidential election. A new trade war worries China, but they are much better prepared than in 2018 as they continue to expand their Belt and Road trade initiative that includes Brazil. China has sent several high-level trade delegations to Brazil to prepare for securing future tonnages of ag goods. Another Chinese delegation will be heading to Brazil in late October. Politically/economically, China will be favouring Brazilian ag supplies.
- The US soybean market senses a record large Brazilian soy crop and fading Chinese demand for US soybeans as its December import need is mostly filled.
- WASDE US 2024/25 soybean export estimates are being questioned and seen as too high. And soybean/grain price ratios are under pressure with long term support noted at 2:1 in the spot Chicago soybean/corn ratio. Technically, soybean futures appear to be in position to test contract lows at $9.75 basis January.
- Chicago brokers estimate that the managed money has sold 4,300 contracts of soybeans, while buying 6,100 contracts of corn and 2,600 contracts of wheat. In soy products, the managed money has sold 4,200 contracts of soyoil and a bought a net 900 contracts of soymeal.
- FAS/USDA reported the sale of 1.623 million mt of corn to Mexico (soft drink industry?) with 1.043 mt for delivery in 2024/25 and 579,120 mt for 2025/26. 332,000 mt of US corn to an unknown destination (Spain?) and 175,000 mt of US soybeans to an unknown destination for 2024/25.
- EU nations signed off on a 12-month delay on their deforestation rule known as EUDR citing time which is needed for end users and importers to secure non deforested supply. The decision must be ratified by the Parliament, but the EUDR fate is known. The EUDR year delay will help Brazil which was behind in certification, and EU end users which will see the expansion of the US crush industry as providing additional supply. It was hoped that US meal export demand would be helped by EUDR as US commercials aided US farmers geo-certify that land has not be recently deforested.
- Overnight rains were heavy and varied across Mato Grosso as soybean seeding gains speed. The GFS weather model was delayed but has since restarted after a computer glitch. The GFS is forecasting a good mixture of rain/sunshine across Brazil/Argentina for the next 10 days. Northern Brazil will see daily rainfall chances of 0.25-1.50” and locally heavier. It is a process, but the forecasts are consistent with near to above normal rainfall and near to below normal temperatures across Northern Brazil into November. And the coming dry slot for Argentina will allow farmers to seed first crop corn/soybeans. S American weather leans positive for spring planting and soil moisture replacement.
- The gut slot of the US corn harvest is ahead with producers to sell what crop exhausts on farm storage. The US soy harvest will wind down this week with cash sales becoming limited. However, the surge in Chicago open interest since Monday reflects that macro funds are returning to the “Trump Trade” and betting on new tariffs and a US/China trade war.