- It has been a another mostly weak session in Chicago, with better than expected rains moving across E IA & W IL. This has pulled Dec corn down to last week’s low at $3.70. Nov beans are 7 cents off session highs. US and world wheat futures also continue to probe for elevated autumn export demand, which it seemingly has been unable to find.
- Spot Russian wheat fob offers have fallen to $191/mt, vs. $195 in early August and vs. $225/mt on this week a year ago. French cash wheat has found new seasonal lows at $186/mt. French wheat a year ago was trading at $245-250/mt. There are hints that export commitments in the EU and Black Sea are struggling as importers stay hand-to-mouth. The world wheat market has acted as a weight on US corn values.
- Radar maps show decently organized rainfall working across the western third of IL currently. This event was largely unexpected by EU and GFS model solutions released late Monday evening.
- Hourly rainfall maps show accumulation in the last 24 hours across E IA/WIL in a range of 0.25-1.50″. Additional light but widespread rain will linger across the E Plains and majority of the principle Corn Belt into Thursday. Yield risks persist, and the duration of the growing season is far from certain. But the market is trading recent and upcoming boosts in Eastern Midwest soil moisture.
- S American currencies continue to recover from last week’s collapse, with the US$ down slightly today. WTI crude is stable at $56/barrel. Ethanol production and blend margins are up slightly this week amid weakness in corn and ethanol values. Wednesday’s EIA report is expected to show a slight uptick in weekly production. US ethanol stocks, however, will remain perched near record highs at 1,000 million gallons.
- The only bright spot today has been in world vegetable oil markets, which are maintaining support amid developing dryness in Malaysia and Indonesia. Spot rapeseed futures in Europe are nearing contract highs at €380/mt ($420/mt) as rapeseed oil prices have reached new 21-month highs. Dryness in Southeast Asia will be watched closely amid slowing crush rates in China.
- Participants from the Pro Farmer Tour continue to find yield variability as the trek across toward the Central Midwest is generally finding solid potential in NE and very immature crops in IN.
- Warmth in September is desired across the Northern and Eastern Corn Belt. Sep temperature guidance is trending warmer, but the near-term forecast keeps temperatures at substantially below normal.
- The midday GFS weather forecast is much wetter in all but the Southern Plains over the next 10 days. Most important is that high pressure ridging relaxes its grip on the Plains and Midwest into August 30. This will allow for a steady stream of moisture to be funnelled across the heart of the US Ag Belt. The GFS forecast is also cooler than the morning run, with overnight lows to fall into the 40’s across ND, MN and WI Aug 30-31.
- Additional official Pro Farmer yields are awaited, but amid a wetter US forecast, follow-through buying needs a new supply fear to sustain rallies. This year only combine data will give the market a real sense of future yield changes.