- Chicago grains are easier with soybeans holding in the green in mixed midday action. An overnight rally failed to gain any bullish euphoria with the Midwest harvest to restart in the west on Tuesday. The US soybean harvest will surpass 50% sometime this week with corn to reach that same level during the closing days of October. US corn harvest progress will be much slower than soybeans with farmers waiting for the crop to dry down. Otherwise, no Chinese sales announcements produced selling from some of the faster moving bulls. A mixed Chicago close is expected in an overall sideways marketplace.
- Chicago brokers report that funds have sold; 3,200 contracts of wheat, 4,100 contracts of corn, and 3,000 contracts of soybeans. The funds are on the sell side of the marketplace this morning in all Chicago grains except soyoil, where they are flat.
- US Export Inspections for the week ending October 17 were; 20.9 million bu of corn, 47.6 million bu of soybeans, and 20.7 million bu of US wheat. The soybean export total was in line with trade expectations while wheat was better and corn less.
- For their respective crop years to date, US corn shipments are 119 million bu (down 194 million bu or 62%), US soybean shipments are 237 million bu (up 16 million or 7%), while US wheat exports at 370 million bu (up 68 million or 22%). China shipped out just 2.6 million bu from the PNW, so the soy shipments were largely from others.
- Black Sea wheat prices have been rising on short covering, tight fisted farmer holding and some unusual Russian cross border trade into Kazakhstan. The combination has forced a rally in world wheat prices as end users stepped up their forward coverage. However, with just Algeria in the world market on Tuesday, the outlook for world wheat export demand has subsided and a correction appears to be under way. Moreover, it is doubtful that Black Sea wheat can rise too far above $210/mt or just a few dollars above current levels. As rain helps the Argentine wheat crop finish, future wheat rallies will depend on the finding of new demand to China.
- The GFS forecast calls for near normal rains for Brazil into November 1. There is no evidence of any lasting dryness for either Argentina or Brazil over the next 10 days. The building El Niño favors Brazilian 2020 yields.
- As a Central Midwest storm system pulls eastward, the forecast is drier for the remainder of the Central US over the next 10 days. The forecast aids the harvest for the N Plains and the W Midwest as colder Canadian air filters southward. Following a few warm days, temperatures turn chilly into November. The midday model maintains the trend of below normal temperatures and rainfall for much of the Plains and the Midwest.
- China has an acute need for red meat imports, but their interest in US soybeans and grains is said to be slowing. Amid a US soy harvest that will speed ahead later this week, it will be difficult to sustain a further bull rally. Short of a S American drought, world grain markets are oversupplied. But amid the US/China political uncertainty we would suggest some caution.