- Chicago little changed in mediocre volume; Brazilian, Black Sea weather issues linger; No new US export sales announced.
- Chicago futures are mixed, but little changed, with wheat contracts forced to contend with selling in Paris milling futures and the ongoing absence of upward momentum on Russia’s cash fob market, while corn and soy add very modest premium. Market focus is transitioning from record US yields to positive seasonal trends in all market between early autumn and early spring, while numerous weather issues linger in the background. Other market-driving input is lacking. Volume is rather mediocre so far today.
- CONAB in its first look at new crop production pegged 2024/25 Brazilian soybean production at 166.3 million mt, vs. USDA’s 169. 2024/25 total Brazilian corn production is forecast at 119.8 million mt, vs. USDA’s 127. There is not much that can be said about new crop Brazilian output and exports until seeding is complete, and seeding dates today are highly uncertain, and until Dec-Jan weather patterns are better known.
- We note there is less confidence in CONAB’s forecast given the lack of convergence with USDA balance sheets. Additionally, trade data implies USDA’s 2023/24 Brazilian soy production estimate of 153 million mt, vs. CONAB’s 147.4, is closer to reality. Unfortunately, it remains that it is exports 8-10 months after harvest that is the best indicator of Brazilian crop yields production.
- FAS’s daily reporting system was void of new US export sales. US Gulf corn is quoted near parity with other origins into Asia for early autumn arrival, and so there is competition for nearby importer demand.
- There is time for weather improvement in the Black Sea and South America but worry accelerates if pattern changes stay absent into early October. We would note recent rainfall in Ukraine was less widespread than expected, and a pattern of net soil moisture loss is most probable in key winter crop producing areas of E Ukraine and S Russia into Oct 1.Soil moisture is insufficient (absent entirely) in eastern and southern Ukraine as well as southern Russia.
- The midday GFS weather forecast keeps in place a pattern of complete dryness and abnormal heat across central and northern Brazil throughout the next two weeks. Sustaining drought at tropical latitudes of Brazil, including Mato Grosso, is difficult, but it is soybean seeding dates that are in the hands of Mother Nature. A year ago, Mato Grosso soybean seeding was 35% complete on Oct 15. Rain is needed before fieldwork begins this year.
- In the US the GFS weather forecast maintains needed rainfall across the eastern Midwest and Great Lakes Region in the 6-10 day period. Heavy showers remain projected across the Central Plains, and so rainfall of 1-2” will be spread from KS/NE into OH/PA Sep 22-25. It is too late to aid yield potential but any/all rain is welcomed following the expansion of abnormal dryness/drought and as river levels across southern sections of the Mississippi remain deflated. Temperatures lean above normal to well above normal throughout the next 10 days.
- It is a dull/choppy day. Crop conditions imply little change to NASS’s projected yields in mid-Sep. Combine data over the next 3-4 weeks will determine the extent that late season heat and dryness had on pod and kernel weights. Be prepared for choppy/rangebound trade through the remainder of September, but lingering issues in Brazil and the Black Sea along with positive seasonal price trends suggest breaks are opportunities for end users.