- Chicago futures have drifted lower at midday, with corn and wheat unable to break through first technical resistance. Major moving averages remain just above current prices, and the spark needed to trigger more pronounced buying/short covering is absent this morning. European milling wheat futures have turned lower in sympathy. Newswires generally have been rather quiet. The EIA’s weekly energy report is delayed until Thursday following the Labor Day holiday in the US. US weekly export sales are out on Friday.
- Egypt’s GASC secured just one cargo of Russian wheat for late October arrival at $218/mt, basis fob. Last week Egypt bought six cargoes of Black Sea wheat at an average price of $224/mt, fob, and so this tender reflects ongoing aggressive wheat offers out of Russia.
- US brokerage firm Allendale, via survey, pegs US corn yield at 177.7 bushels/acre. Production is estimated at 14,529 million bu, vs. USDA’s 14,586 million, a negligible difference. So far, no major surprises have been found from surveys and yield checks. Work does suggest it is unlikely NASS will raise corn yield in next week’s report. A final yield of 176-178 is most probable. Allendale estimates US soybean yield at 52.2 bushels/acre. US soy production is estimated at 4,636 million bu, vs. USDA’s 4,586. Soybean crop ratings and recent private estimates lean toward an ongoing supply-driven bear market without improvement in US/China trade.
- Official US corn and bean exports in July were a bit larger than expected. Using FGIS data in August, we peg final US soybean exports at 2,134 million, 24 million above USDA. Final US corn exports are calculated at 2,435 million bu, 35 million above USDA. Barring a surprise in Jun-Aug corn feed/residual, the odds of 2017/18 corn end stocks falling below 2,000 million bu are elevated.
- Australia’s climate outlook is trending drier in mid-Sep and beyond. Scattered rain will impact parts of NSW on the weekend, but dryness returns thereafter.
- There is also a noticeable lack of precipitation forecast in Western Australia into Sep 20. W Australia has been one of the country’s few bright spots in terms of rainfall since summer, but close attention will be paid to rainfall there moving forward. A wetter pattern is desired prior to early October.
- The central US GFS weather forecast is wetter across the Central and Eastern Midwest through the next 4-5 days. Cumulative rainfall in MO, IL, IN, OH and KY into next Mon/Tues is estimated in a range of 2-5”, with even heavier localised totals favouring C IL and C IN. A welcomed drier trend will be established in the 6-15 day period. Central US temperatures stay mostly above average.
- It is a day of position squaring in Chicago. NAFTA negotiations will be watched closely this week. Close attention will also be paid to forward global wheat prices, as Gulf HRW is level money with Russian origin for November arrival.