- Once again, fresh news is thin on the ground. US crop data, now emerging as the government return to work pushes through the system shows inter wheat planting as 79% done bang on the five year average and some 53% emerged, one point below the five year average. Corn is 39% harvested, unsurprisingly below the five year figure of 53% whilst soybeans are 63% harvested, six points behind the five year average. Weather conditions appear to remain favourable for harvest to progress at a good pace.
- Trade today has been mixed with soybeans and corn looking for lower levels whilst wheat has just kept in positive territory reputedly on the back of stronger Black Sea levels. These firmer levels are a consequence of farmers focusing upon fieldwork as they complete corn harvest and concentrate on planting wheat whilst there is a favourable weather window, rather than selling their crops. The likely timeframe for a resumption of farmer selling is within the next two weeks – look for a break in prices if this is the case!
- During the course of the US “shutdown” it is believed that China has purchased 1.2 million mt of corn and 3 million mt of soybeans from the US. We cynically suggested some while ago that a “stealth” tactic could have been adopted by China whilst publicity could be avoided, and the data fits our theory quite nicely!
- Dry conditions persist in Argentina where the last three months have shown sharply below average rains. It is suggested that as much as 100mm is required as a matter of urgency across the soybean belt although the likelihood of this occurring is only around 25% probability. The planting delays in corn and sunflower as a result of the dry conditions may also roll into soybeans if rain does not materialise soon, and early crop development could well be adversely impacted.
- In marked contrast, there is an expectation for significant rains in southern Brazil potentially delaying corn and soybean planting as well as harvesting of wheat but central regions (Mato Grosso) are forecast drier, which will assist soybean planting progress now estimated at 27% (to 17 Oct) but this is at the expense of soil moisture levels.
- EU wheat prices today have elevated the Paris milling contract to Sterling equivalent premiums over London which have not been seen for some time, Nov ’13 Paris reached close to £8/mt premium (on a Sterling basis) and looks to be reflecting the potential tightness in milling quality grains compared with feed qualities.