- US wheat futures are down 3-8 cents on regionally beneficial rainfall in Europe and Russia and a stronger US$, while row crops markets maintain overnight strength. Just how widespread soybean damage is will be at issue this week, and funds last Tuesday have been sizable net seller of grains. Managed funds last Tuesday surprised the trade by establishing a net long position for the first time since summer. However, that length was liquidated in the following days. Fresh input is needed to sustain direction in one direction or another.
- Crop quality issues are rarely bullish, but a positive price/basis response can be expected if enough beans fail to meet deliverable grades. A clearer US yield/quality picture will be available by late week. US export inspections through the week ending October 18 included 38 million bu of corn, vs. 40 million in the previous week; 14 million bu of wheat, vs. 17 million the prior week; and 42 million bu of soybeans, vs. 44 million. All were within trade guesses. For their respective marketing years to date, the US has shipped 308 million bu of corn, up 72% from last year; 302 million bu of wheat, down 24%; and 218 million bu of soybeans, down 40% from this week in 2017. US soybean sales and shipments continue to lag the USDA’s already weak annual forecast.
- Syria this morning bought 200,000 mt of Russian wheat at $255/mt, basis cost and freight. This compares to Syria’s last buy of $225/mt in mid-September. Russian exporters continue to find demand, but a trend of higher world wheat cash prices remains intact. Note, too, that Russia’s Ruble has rallied further and is testing late Sep’s high. Russian exporters no longer have access to ultra-cheap domestic supplies. Crude is down $.20/barrel at $68.90. The Dow is down 160 points.
- The midday central US weather pattern is much warmer in the extended period but otherwise little changed. Confidence is rising with respect to the return of soaking Midwest precipitation beyond Nov 1. The GFS has been consistent in this shift in recent days. Other models are beginning to follow. Favourable dryness persists through the week ahead. Beginning next Wed/Thurs the mean position of the Central US jet stream is forced southward. Cumulative rainfall Oct 31-Nov 5 is projected in a range of 1-3”. The heaviest totals, for now, are offered to E KS, MO, IA and N IL. Fortunately, no major snow event is indicated.
- US wheat futures have fallen to test major chart-based support. US Gulf wheat’s position in the world market for Dec-Feb arrival will improve further. Corn and beans are rangebound in the near term.