- Chicago midday values are slightly lower with soybeans tugging values downward on the warmer forecast for the Upper Midwest and the Northern Plains. US/China remains a topic of discussion following the USDA announcement of 581,000 mt of US soybeans to China. US President Trump stated this morning that that a US/China deal could come sooner than expected which underpinned the marketplace. Yet, Chicago traders report that they are tired of reacting to every US/China comment, and most will say that they will believe a deal when it is signed. China starts a week long holiday on Tuesday and will be out for much of next week.
- Chicago trade volume is being restricted by the coming Central US harvest and Monday’s USDA Crop Report. Variable yields are being reported by corn/soybean farmers with a weak yield trend noted. The market will look to the October NASS/WASDE report for yield trend confirmation as NASS plots are harvested.
- Chicago brokers report that funds have sold 2,100 contracts of Chicago wheat, 4,900 contracts of corn, and 2,600 contracts of soybeans. In soy products, funds have sold 2,100 contracts of soyoil and 2,900 contracts of soymeal. The bulls need to eat every day and selling accelerated in beans at the 100-day moving average.
- FAS confirmed the sale of 581,000 mt of US soybeans to China. China is out of the market from Tuesday and the rest of the week for their 70th Anniversary of Communism. This means that if new US soybean demand is to be completed, it likely will occur Thursday, Friday or Monday. We suspect that China may want to secure the remaining 1.0-1.5 million mt of rumoured/unsold US soybeans before their trade team arrives in Washington DC for new trade negotiations.
- The Argentine Grain Exchange estimated their 2019/20 wheat crop at a record large 21 million mt, the soybean crop at 51 million mt with corn at 50 million mt. Such crops would be sizeable and create considerable new export competition with the US.
- US/Japan announced a trade deal today at noon that would level the tariff field on US ag imports into Japan (as if the US was a TPP member) . The only US ag commodities that did not get like treatment were US dairy products and rice. This is a “big” and “needed” deal since Japan is the US’s largest importer of wheat, beef and pork. The trade pact keeps US ag products flowing to Japan and maintain this important US marketplace. This is an important trade accomplishment for the Trump Administration.
- The midday GFS weather forecast offers 8 hours of near or slightly below 32 degrees for ND, N MN and N WI on Oct 3. The frost would occur outside of the primary US corn/soy areas and should not produce harm to US yield potential. A few snow flakes are possible over MO and NW ND, but any accumulations will be less than 1.0″. The ground is too warm for any lasting accumulations. The forecast then warms up with there being no evidence of a frost/freeze into October 10. The midday forecast is warmer than the overnight run, but equally as wet. Heavy rains of 1.5-3.00″ look to fall across; KS, N MO, IA and N IL. This rain will saturate soils/cause localised harvest delays amid all the rain. The SE US holds in an arid dry flow.
- Chicago values are adrift with wheat/soy tugging the market lower while corn is more stable as early harvest yield reports disappoint. US President Trump says that China is making large purchases of US red meats. Traders will be looking to Thursday’s FAS Weekly Export Sales report for confirmation. Brazilian weather forecasts looking wet during October, potentially creating selling opportunities on rallies.