- Ag futures are again mixed at midday, with soybeans finding support on additional sales to China while grains are slightly lower on another week of disappointing export demand. Talk that China is committed to buying $20 billion of US ag products is being met with mixed sentiment. Most of the trade understands that this value is in line with pre-tariff Chinese buying, and still details of the proposed $20 billion are not available. There is talk that China scaling into purchase of $40 billion would require an elimination of tariffs on Chinese goods. All eyes will be on November’s APEC summit in Chile.
- US export sales through the week ending Oct 17 included 19 million bu of corn, vs. 15 million the prior week; 10 million bu of wheat, vs. 15 million the prior week; and 17 million bu of soybeans, vs. 58 million the prior week. Recall US corn sales need to average 39 million per week to meet the UDSA’s forecast.
- Only Mexico is buying US corn in bulk. Large soybean cancellations worth 21 million bu were made by unknown destinations.
- Weekly US pork sales totalled just 19,000 mt, with no new Chinese demand recorded. CME hog futures have extended this week’s correction amid the overhang of a nearby oversupplied market.
- For their respective marketing years to date, the US has sold 427 million bu of corn, down 49% from a year ago; 517 million bu of wheat, up 13%; and 678 million bu of soybeans, down 12% from mid-October a year ago. FAS did announce another US bean sale to China worth 264,000 mt. Yet, pace analysis suggests even more Chinese demand is needed to meet the USDA’s annual 1,775 million bu soybean export projection.
- Australian wheat crop estimates continue to shrink. Contacts suggests a sizeable amount of wheat in the East will be harvested for hay. This will aid feed supplies there, but will work to lower actual wheat for grain production. There is also a growing concern over autumn plantings as the Australian sorghum crop needs to be completed by December. The two-week Australian weather forecast remains dry. Longer term climate guidance maintains a pattern of below normal precipitation in primary grain areas into late November.
- The midday GFS forecast is wetter in Cordoba and Buenos Aires in Argentina this weekend but is drier in Central Brazil over the next two weeks. The EU model has been favourably wetter in Brazil, but closer attention will be paid to Brazilian precipitation forecasts moving forward. The wet season there is supposed to begin in earnest by November.
- The midday US GFS weather forecast is drier in IL but otherwise unchanged. Heavy precipitation into early November will be confined to the Delta/Southeast and far Eastern Corn Belt. A deep low pressure trough will sink into the N Plains/Great Lakes. This will block meaningful precipitation but will send Central US temperatures to levels 6-20 degrees below normal. Freezing overnight lows will be widespread across the US Ag Belt Oct 30-31. Harvest progress accelerates.
- The lack of details regarding US-China’s partial trade agreement have capped new raw material buying . Drier extended range Brazilian forecasts give the bears pause. Ag markets lack direction into the USDA’s November WASDE release.