- Ag futures at midday have traded both sides of unchanged in mediocre volume. Macro markets are stabilising following Wednesday’s lashing, while concern over US yields and S American precipitation in October have kept new meaningful selling limited. Choppy trade lies into NASS’s Oct 10 report, as neither the supply bulls nor the demand bears will hold leverage to move the market significantly. Actual corn harvest won’t reach 50% complete until the first of November. Precise US supply estimates await NASS’s Nov report.
- US export sales through the week ending Sep 26 were disappointing for corn and wheat but better than expected in soybeans. Corn sales through the period totalled 22 million bu, vs. 19 million the prior week. A pace of 34 million bu/week is needed to meet the USDA’s forecast. Wheat sales totalled 12 million, vs. 10 million the prior week. Net durum sales cancellations of 2.3 million bu were recorded.
- US soybean sales totalled a sizeable 76 million bu, vs. 38 million the prior week. Sales made to China totalled 57 million bu. FAS this morning also announced new soybean sales to China worth 225,000 mt.
- For their respective crop years to date, the US has sold 382 million bu of corn, down 51% from last year, 525 million bu of soybeans, down 29%, and 474 million bu of wheat, up 14% from late Sep 2018. Corn exports will struggle with non-US origin offered measurably cheaper than the US into early 2020. Soybean exports need more than just goodwill Chinese purchases, or adverse S American weather. US wheat sales are on track to meet the USDA’s 975 million bu forecast.
- Another 10 days of complete dryness is offered to most of Australia’s wheat belt. Any pattern shift hereafter will have a limited impact on wheat yield potential. 60-day rainfall in New South Wales and Queensland, which combine for 35% of total Aussie wheat production, sits at 5-30% of normal. Aussie crop estimates are drifting closer to last year’s 17.3 million mt, vs. USDA’s projected 19.0 million. Aussie wheat futures in US$ have rallied 10% since late August.
- The midday GFS weather forecast maintains needed soaking rainfall across wheat areas of Buenos Aires Oct 10-12 but has trended drier in Central Brazil. High pressure ridging is forecast to return to C Brazil beyond the middle of next week. A pattern of Brazilian dryness resumes Oct 11-17. Long range climate guidance maintains below normal precipitation in Central Brazil into the end of October. Soaking rain will be needed soon thereafter.
- The midday GFS weather forecast has added rainfall to IA, MN, WI and IL Oct 11-12. The GFS also keeps intact a blast of cold air late next week. Overnight low temperatures will fall into low/mid-30s across the Dakotas and NW Corn Belt, including parts of N IA. Damage to national yields will be minimal, but the recent rush to maturity will be slowed moving forward. Harvest into mid-month will be challenged by wet soils.
- Macro-driven weakness was short lived amid US production concerns and what has been a rather slow transition to the wet season in S America. Breaks into the Oct 10 crop report will be brief/shallow. Black Sea corn yields remain solid. US grain export potential remains weak.