- It has been a mixed morning in Chicago, with row crops steady to higher and wheat down 4-6 cents. EU milling wheat futures in Paris have followed to modest losses. Better rainfall lies ahead for the driest areas of Western Argentina, but otherwise the EU and US markets are still looking for export demand.
- The highlight this morning is a bearish weekly EIA report. US ethanol production through the week ending Oct 12 fell to 297 million gallons, down 9 million on the week and slightly below mid-Oct a year ago. Slowed weekly ethanol grind is common during harvest, but production was lower than expected nonetheless. US ethanol stocks last week totalled a near-record 1,014 million gallons, up 5 million on the prior week and up 12% on this week a year ago. Ethanol stocks are large even amid solid domestic use. US crude stocks also rose another 6.4 million barrels to the largest level in 15 weeks. Record US production is needed to sustain builds in stocks, but finally production is exceeding total disappearance. Spot WTI crude is down $1.80 at $70.10, testing its 100-day moving average. Ethanol and gasoline futures have followed.
- Jordan bought one cargo of optional origin wheat at $263/mt, including cost and freight. This compares to its last purchase in early Sep at $257/mt. The trend of rising world wheat cash prices is intact, but the trade has noticed a general lack of world tender activity in recent weeks.
- The S American forecast has trended much wetter across Central Brazil in recent days. Seasonal rains have arrived much earlier than in recent years. The midday GFS features accumulation of 2-5” across Mato Grosso and Goias in the 8-15 day period. If this verifies, Oct precipitation in Central Brazil will be a bit better than average.
- US weekly export sales should include 40-45 million bu of corn, 20-25 million bu of soybeans and 17-22 million bu of wheat. All estimates are fairly routine, but in the case of beans cumulative sales will fall further behind last year.
- The midday central US weather pattern has added rain/light snow to the Great Lakes region Oct 27-29. Otherwise, the outlook maintains complete dryness across the Plains and Midwest into the opening days of November. Temperatures will lean a bit cool, but additional lasting harvest delays are not expected. Canada, too, will be dry over the next 10-12 days.
- Corn futures showing strength in the face of bearish ethanol data is noteworthy. The world wheat market has simply been rather dull since early October. And a general lack of news/excitement is expected into late month. Note also that El Niño bodes favourably for Argentine weather and yield.