- Wheat sags on weakness in European market; Row crops add premium on US weather forecast; US corn exports stay robust.
- Chicago ag markets are mixed at midday. Corn and soy are adding modest premium as a two-week period of dryness and expanding warmth are forecast across the Plains, Midwest, and Delta, while FAS in its daily reporting system featured welcomed confirmation of Chinese demand for US soybeans. Exporters this morning sold a total 442,000 mt of soy to China/unknown for new crop delivery. Importers in Asia and elsewhere are now seeing the US soy as the world’s low-cost supply for autumn/winter delivery and are reacting accordingly. No new corn sales were announced, but fob premiums in Ukraine and Brazil remain well above US Gulf origin into Nov/Dec.
- Wheat futures worldwide have shed premium as the Russian cash market remains stuck at $219-224 for Sep-Nov delivery. Egypt’s talk of including Turkish wheat as an acceptable origin underscores larger year on year stocks in the Mid-East. Turkey will struggle to export supply amid its relatively high prices, but larger crops as Mid-East tension have harmed regional demand growth.
- US corn export inspections in the week ending August 15 totalled 46 million bu, vs. 39 million the previous week and vs. 20 million in the same week a year ago.
- The US’s competitive position in the global marketplace continues to be reflected in strong counter-seasonal export disappearance, and without a collapse in weekly inspections in the second half of August work suggests the USDA will hike its 2023/24 US corn export forecast another 25 million bu to 2,275 million.
- A Canadian rail strike looks to be unavoidable later this week (Thursday) as each side remains far apart on negotiations with just days to go. Contacts suggest mandatory arbitration will be enforced if the strike lingers beyond a few days, but tensions are high. It is the disruption to the movement of consumer goods that is most concerning. Rail has an outsized influence on Canadian logistics.
- Autumn shows no signs of approaching in far E Europe, Ukraine, and Russia. There is still no meaningful rain forecast there into Aug 29, while temperatures exist some 5-10 degrees above average. The Black Sea’s Spring row crop harvest will move along smoothly, but an easing of drought is needed prior to winter wheat seeding.
- The midday Central US GFS weather forecast is consistent with morning output in keeping rainfall confined to Manitoba in Canada, while tropical activity stays largest east of the eastern seaboard into Aug 29. Midwest temperatures stay mild into Fri/Sat. An expansion of abnormal warmth occurs thereafter, with max temperatures to reach into the low 90s across NE, MO, southern IL, and southern IN by Sunday. Variable temperatures are forecast in the 8-14-day period.
- The structure of the market (sizeable fund short positions) and the end of bearish seasonal price trends in late Aug/Sep suggest risk assessment moving forward will be more two-sided. Key in the short run is whether Dec Chicago corn can settle above its 20-day moving average at $4.04 and whether Nov beans find buying/short covering interest above $9.80.