- Overnight strength in soybeans faded just after the morning open and technical selling kept the market lower into late in the day. Soybean export inspections hit a marketing year high of 48 million bu, and the USDA announced sales of 120,000 mt to unknown destinations, all of which had no noticeable effect on Chicago trade. After the close, NASS reported that the US soybean harvest had advanced 19% last week to 72% complete. This was the largest advance of the year, and the most for late October since 1986. However, there remains a significant amount of work to be done in the Northern and Western states. Kansas at just 42% complete was still more than 28% behind average. IA moved its harvest forward by 35% last week to 71%, while IL leads the Cornbelt at 86% complete. Slow exports and the advancing harvest continue to weigh on Chicago soybean trade, with next support for January near $8.30.
- Chicago corn futures ended fractionally lower amid limited corn-specific news. US harvest progress as of Sunday reached 63% complete, a bit below the longer term average but compared to 52% on this week a year ago. Another week of active fieldwork lies ahead for Plains, but delays return to the Southern and Eastern Midwest. Harvest is 50-77% complete in IN, OH and PA. Cash prices in Ukraine continue to erode amid better than expected yields. There is talk that final production there may reach 33-34 million mt, vs. USDA’s 31. This additional supply will likely be sent directly to export markets. Consequently, the USDA’s total world corn trade forecast seems slightly too low, but Black Sea, US and S American corn are all available to importers for late-year delivery. The University of IL pegs new crop corn seeding at 91.1 million acres, up 2 million, based on expected returns. This is noticeably below prior trade expectations. Wheat, small grains and cotton are favoured with expansion in 2019/20. Work maintains that spot corn is stuck between $3.65-3.85. The issue in the near term is whether NASS’s Oct yield is realised.
- US wheat futures moved little in either direction. Egypt’s buying of US wheat last week confirmed that a secondary bottom has likely been posted, while a further surge in value requires better export demand on a weekly basis. Gulf HRW is offered at parity with Russian for Dec arrival, basis fob. We expect the US and EU markets to battle for world market share over the next 90 days as Russian sales and shipments slow. Funds bought a net 2,000 contracts in Chicago. Interior Russian wheat prices continue in a broad bullish trend, and close attention will be paid to miller/livestock feeder sentiment there in the weeks ahead. US winter wheat crop conditions were put at 53% good/excellent, vs. 52% on this week a year ago. This is a bit lower than expected, but very close to the 10-year average. We would note that good/excellent rating in KS is pegged at 42%, vs. 55% a year ago. Slowly but surely the US will attract additional non-traditional export demand.
- Domestic wheat prices in Russia this week are again steady to higher. Prices near ports are up very slightly, but further inland prices continue to soar relative to early 2018 lows. Sourcing high quality interior wheat will be more difficult, and seasonally interior Russian wheat prices move higher into early the following year. We strongly doubt Russian fob offers fall much, if at all, through the remainder of the marketing year.