- It has been another morning of wheat liquidation, but corn and soybeans have done very little ahead of the weekend. Weekly corn export sales exceeded expectations slightly. Wheat and bean sales were in line with trade guesses. Additional news is lacking. Crude oil has turned lower as the US$ has strengthened.
- Through the week ending August 30, US exporters sold a net 41 million bu of new crop corn, vs. 21 million the previous week. New crop soybean sales totaled 25 million, vs. 22 million the prior week. US wheat sales totaled 14 million bu, vs. 15 million the week before. Total new crop corn export commitments, including old crop carryover sales, rest at 584 million bu, up 64% from a year ago. New crop US soybean commitments total 608 million bu, up 11% from last year. Cumulative US wheat sales stand at 344 million bu, down 23% from last year and the lowest since 2009. Only recently has the US Gulf wheat market become globally competitive. Details surrounding Saudi Arabia’s latest barley tender are absent, but the world barley trade fully expects this tender to push barley prices to newer multi-year highs. On Thursday evening Black Sea barley was quoted at $238/mt, vs. US/Argentine corn at $165. It is a minor issue for US corn supply and demand, but compared to barley, feed and milling wheat, and European corn prices, US corn simply looks cheap.
- Moderate rain is working across the E Plains and Midwest, and will linger in the region into Sun/Mon. Producers bemoan the weakening of corn stands in the wettest areas of IA and WI. Waterways will become inundated across the Central and Eastern Midwest in the next 24-48 hours. The midday GFS weather forecast maintains better rain potential in Central Ukraine in the next 5 days, which is a blessing for wheat producers. Southern Russia has been left dry, and still there is no sign of Central Europe’s drought ending.
- Ahead of the Sep WASDE report, average trade guesses include a modest downgrade to corn end stocks, while soy stocks are expected to balloon to 830 million bu.
- The central US GFS weather forecast at midday is unchanged in the US through the next ten days. Warmth and dryness follow this weekend’s soaking rain. Even the Delta will see much improved harvest conditions beginning early next week. The model does allow moderate rainfall to return to the Western Midwest in the 11-15 day period, but confidence so far out is low. This is particularly true as activity ramps up in the Tropics. We expect the models to have fits with their extended range outlooks moving forward.
- Close attention will be paid to this afternoon’s commitment of traders report. Harvest is also inching northward into the Southern Midwest. It is key that producers find solid corn yields if downside pressure is to return. We maintain that pre-USDA weakness is an opportunity for end users.