- Chicago price action since this morning’s opening has been varied. Corn and soybeans values have extended declines while wheat finds modest buying near Dec Chicago’s 50-day moving average. Russian dryness will persist into at least October and the need for soaking rain thereafter will be immediate. Yet, EU milling wheat futures are down $.04/bu, and so US Gulf wheat prices will stay well above competing origins. FAS’s daily reporting system was absent of new sales for the first time since Sep 8. This validates talk that China’s interest in US products is waning.
- Outside markets are mixed. The Dow has shrugged off a modest boost in weekly jobless claims (870,000 vs, 860,000 the previous week), while spot crude is unchanged. EU milling wheat futures are down $0.05/ nu.
- Through the week ending Sep 17, exporters sold a net 84 million bu of corn, vs. 63 million the previous week, 117 million bu of soybeans, vs. 90 million the previous week, and 13 million bu of wheat, vs. 12 million the previous week. US corn and soy sales were at the very upper end of trade estimates, but last week’s robust demand for US row crops is not a surprise.
- Key moving forward will be whether private firms in China step in to replace the recent flood of demand from COFCO and Sinograin.
- In their respective marketing years to date, the US has sold 890 million bu of corn, up 147% above last year, 1,306 million bu of soybeans, up 193% from last year, and 495 million bu of wheat, up 7% from last year. Pace analysis indicates that the USDA’s US soybean export forecast is too low, but the extent of any upward revision will hinge upon S American crop prospects this year, and whether global importers return to the US market in early summer 2021.
- Pace analysis indicates USDA wheat and corn export forecasts are accurate. US wheat sales have been slowing following weeks of substantial premiums to other exporter markets. SRW sales through Sep 17 totaled just 0.25 million bu, SRW is the world’s most expensive wheat available for export, while SRW sales need to average 1.3 million bu per week. SRW stocks may rise another 5-10 million bu in coming USDA reports.
- Interior corn basis changes have been variable but have weakened across the primary Corn Belt. August’s weather and demand-driven market have been unique but harvest pressure will hang over price determination nearby as the second largest US corn crop on record will be gathered over the next 30 days.
- A rather wet, and favourable, climate pattern will be intact across the whole of Europe and Ukraine over the next 10 days.
- The midday GFS weather forecast maintains blocking pattern aloft Southern Russia. This will allow moisture deficits to worsen there. The need for soaking rain will be immediate come mid-October.
- The Central US weather forecast features spotty showers across the Eastern Midwest during the first half of next week but otherwise threats to harvest progress are lacking. The model is also consistent in forecasting a shift to cooler temperatures next week and beyond. However, freezing temperatures are not expected outside of ND and far northern MN and WI.
- Bull markets need constant fuel. The accelerated spread of Covid in Western Europe will weigh on global financial and energy markets. A slowing of Chinese demand for US soy will coincide with the gut slot of harvest. Large S American soybean crops are demanded in 2021, but Nov beans above $10.45 last week had digested the recent tightening of the US balance sheet.