- Ag markets are 7-9 cents lower across the board this morning following another week of disappointing export sales, and pessimistic sentiment surrounding US-Chinese relations. The US Administration awaits a firm proposal from China to resume talks, but this is unlikely to happen any time soon.
- US export sales through the week ending October 18 totalled included just 14 million bu of corn, vs. 15 million the prior and an average of 35 million is needed to meet the USDA’s forecast. Wheat sales were a routine 16 million bu. This matches the pace needed to hit the USDA’s target, but only traditional business was included. Weekly soybean sales totaled 8 million, a new marketing year low and down 3 million from the prior week. Large cancellations are again made by unknown destinations. US bean commitments to China rest at 1.03 million mt, vs. 8.7 million mt on this week a year ago. The only bright spots were decent soymeal (203,000 mt) and oil (26,000 mt) sales. For their respective marketing years to date, the US has sold 844 million bu of corn (up 32% from last year), 774 million bu of soybeans (down 26%) and 461 million bu of wheat (down 17%).
- Disappointing EU and US wheat export demand suggests world trade through October is lagging the USDA’s forecast. The total world wheat trade pie is shrinking, but at current prices it remains that the US (the world’s residual exporter) will ultimately export some 1,100-1,150 million bu. Even this forecast assumes world wheat trade of 178 million mt, vs. the USDA’s 180.
- Producers in Saskatchewan have harvested 92% of their spring wheat crop, with canola harvest at 90%. This reflects a sizeable jump from the prior week. The return of snow lies ahead for the Canadian Prairies, but another 3-4 days of dryness and abnormal warmth are expected in the near term. ICE canola futures have fallen $17/mt since early October. The US$ has scored a new 10-week high.
- The midday central US GFS weather forecast is much wetter and a bit cooler across the Plains in the 8-15 day period. The GFS has been rather erratic this week, and so confidence in its extended solution is low. But in the near term, dryness and near normal temperatures will keep harvest active into the latter part of next week. Beginning Oct 31 low pressure currently aloft Canada sinks deep into the Central US, bringing cooler/wetter air along. Upwards of 9-12” of snow are offered to CO, W KS, NE and SD. This is likely overdone, but an eye will need to be kept on extended range trends in the days ahead.
- Gulf HRW this evening will widen its discount to EU origin through the first quarter of 2019, and widen its discount to Russian origin for Dec-Feb. Wheat futures are oversold, with Dec corn not too far behind. Fundamental wheat data remains supportive. Corn is viewed as cheap below $3.70 in spite of rising Ukrainian yields. Beans need a S American weather issue to trade above $8.75, basis Jan.