- Chicago values are in the green at midday with corn, soybeans and wheat all higher. The volume of trade has been rather meagre in corn, but better than expected in soybeans.
- Chicago soybean futures have led the rally amid rumours that China is asking for offers for US soybeans from the Gulf and PNW. Private Chinese crushers are rumoured to have made purchases with totals ranging from 10-20 cargoes. The thinking is that China is back in the US market as progress in last week’s deputy trade meetings was enough for them to seek new purchases.
- The thinking is that China will secure 4-5 million mt of US soybeans that ship in the October to January time-frame in an ad hoc buying program. This is the period that China has a need for US soybeans as S American seasonally slows and their export industry prepares for their new crop harvest in January. China’s big 70th year celebration starts next week Tuesday.
- The week-long China celebration over the installation of communism in 1949 will limit new cash purchases and new US/China negotiations. It is hoped that the US/China will announce dates of new DC meetings by the end of the week. Talks in the last half of October are expected by the industry. The rally this morning ran back against $9.00 November, but prices higher will depend on new Chinese demand and or continued dry weather for Argentina and Brazil.
- Chicago brokers report that funds have sold 2,100 contracts of Chicago wheat. Otherwise, funds have been buyers of 3,000 contracts of corn, 5,400 contracts of soybeans, and 3,000 contracts of soymeal. Funds are flat in soyoil futures. The end of the month and quarter loom next Monday and we expect that funds will continue to square some of their net short positions.
- US weekly export inspections for the week ending 19 were; 9.2 million bu of corn, 33.9 million bu of soybeans, and 17.5 million bu of wheat. China showed up shipping out 7.6 million bu of soybeans or 22%. The US corn exports of just 9 million bu was the lowest we can find for September in over a decade. The US corn export pace remains dismal amid discounted S American and Ukraine offers.
- Many political pundits are taking a stab at trying to decide if the US and China will be able to resolve any of their trade differences in 2020. Most feel that the old May agreement that China took a red line to has to be the starting point for an agreement. But China is unlikely to agree to more than 90% of that agreement anytime soon and this trade war could go on for some time.
- The midday GFS weather forecast is drier across a much of; IA, WI, MO, and W IL than the overnight solution. The forecast has shifted the rains farther north. The forecast is wetter in OH, PA and the rest of the NE US. A ridge of high pressure holds across the SE US with Gulf moisture being pumped northward into the Central US. Frequent rain chances follow which could delay the onset of the harvest. Unlike the overnight run, the midday GFS elongates this ridge and retrogrades it westward to the Central US. This would be a much drier weather pattern by October 4. Our confidence in this ridge shift west is low, but it is the main reason why the midday is farther north with rain chances. Also, there is an indication of 32 degrees reaching into N Dakota, MN and N WI on Oct 3-4. This is colder and different from the overnight. Our confidence in the midday GFS is low.
- We look for US corn and soy crop conditions to hold steady this week with some catch up in crop maturity. The S American weather forecast is arid/warm for Argentina and dry for Brazil. Rain will be needed soon for early seed germination.