• Chicago values fall on hedge related selling and China’s absence as a US Buyer after January 1; S American weather forecast favourable for seeding.

• Chicago corn, soybeans and wheat are weaker at midday with oil share spread unwinding lifting soymeal futures. The soyoil market has been unable to sustain a recovery amid the lack of clarity on the coming November 5 election. However, more important is the decline in US and Paris wheat futures as Russia looks to sell directly to 13 nations without foreign participation. Russia is showing a desire to become a state seller of grain which means a more opaque world wheat marketplace. We note that December Chicago wheat futures are back down against the 50-day moving average at $5.7075 with today’s price action producing a bearish reversal down. A close below $5.70 December Chicago wheat will likely produce additional fund related selling early next week. Corn and soybeans are following the wheat market lower with the bulls vastly disappointed in market action following yesterday’s recovery. Seasonal price trends are normally supportive following the US Columbus Day holiday, but Chicago valuations are not able to follow through. We look for a lower Chicago close on late day hedge related selling as this will be the last active harvest weekend across the Midwest. Farmers are finishing their corn/soy harvests and concentrating on fertilisation programs for 2025 spring seeding.

• Chicago brokers estimate that the managed money has sold 7,300 contracts of Chicago wheat, 4,900 contracts of corn, and 4,500 contracts of soybeans. The managed money is flat in soymeal, while selling 3,100 contracts of soyoil futures.

• FAS/USDA reported the sale of 21,000 mt of US soyoil for 2024/25, and 125,000 mt of corn to an unknown destination, and 292,800 mt of soybeans received in the reporting period for the delivery to an unknown destination.

• US exporters report that China secured large tonnages of Brazilian soybeans for shipment from February onward this week. We count at least 42-48 cargoes of Brazilian soybeans that were sold to China through May. The fall in price triggered the Chinese demand while US soybean sales are cleaned up for December. China will not secure US soybeans or other ag products after January 1 due to the uncertainty surrounding the application of tariffs on Chinese purchases via the US November election. China has no idea who will be the 47th US president, but amid all the rhetoric of tariffs, they prefer to secure soy/ag products from others to assure price. This means that there is a de facto embargo against US ag products to China until there is certainty on who will be the 47th US President and their trade policies.

• For the week ending October 10 the US sold 18.5 million bu of wheat, 87.6 million bu of corn, and 62.6 million bu of soybeans. The sales pushed US crop year wheat sales to 461 million bu (up 67 million or 17%) and US corn sales to 782 million bu (up 142 million or 23%, with US soybean sales up 38 million bu or 5%). We estimate that China has now secured 12.6 million mt of US soybeans including 3.5 million mt of soybeans sold to an unknown buyer. We see China taking 19.5-20.5 million mt of US soybeans in the 2024/25 crop year, down from last year’s 24.5 million.

• A favourable mixture of rain/sunshine prevails across Brazil/Argentina for the next 10 days to advance the spring seeding. Northern Brazil will see daily rains of 0.25-1.50”. The rain is welcome to restore soil moisture. EC Brazil will be favoured with any heavier rainfall. Forecasted high temperatures will range from the mid 80’s to the middle 90’s.  The Argentine forecast is also favourable with heavy rains to return this weekend and no sign of extreme heat. First season corn seeding is active across Santa Fe, Cordoba, and Buenos Aires.

• Chicago will not be able to sustain a rally until after the November 5 US election. Favourable S America weather along with China’s absence for US ag products (soybeans) from January onward leaves the market to edge lower into Halloween. Some faster moving hedge funds are betting that former US President Trump will be re-elected which will start another trade war with China. US farmers are looking to sell cash corn/soy on rallies. Chicago downtrends look to continue.

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