- Mixed in diminished volume are Chicago values at midday with corn/wheat slightly lower while soy futures trade into the green. Few traders have any conviction on being bullish or bearish amid uncertain trade details between the US and China. And the weekly NASS Crop Progress/Condition report is likely to reflect limited harvest progress and a decline in ratings following last week’s wet weather and snows across the Dakotas. Traders want to see enlarged Chinese demand to have comfort in Trump’s promise that US farmers would see China scale up to $40-50 billion of ag purchases in several years.
- Chicago traders estimate that funds have sold 1,100 contracts of Chicago wheat and 4,600 contracts of corn, while buying 3,100 contracts of soybeans. In soy products, funds have bought 4,200 contracts of soyoil while selling 1,900 contracts of meal. Soyoil futures have pushed to their best levels since March on rumours of new US export demand amid rising tropical oil values.
- US weekly export inspections for the week ending October 10 were 18.5 million bu of corn, 35.1 million bu of soybeans, and 17.0 million bu of wheat.
- For their respective crop years to date, the US has shipped out 347.7 million bu of wheat (up 59.9 million or 21%), 98.3 million bu of corn (down 174 million or 64%), while US soybean exports at 189.6 million bu are up 13.1 million or 7%. China shipped out 5 million bu of US soybeans accounting for 28% of the weekly US total. We believe that WASDE is likely to reduce their 2019/20 corn export estimate by another 100-150 million bu based on the sales/export pace to date.
- The International Research Institute forecast that S American will see spotty dryness for NE Brazil with temperatures above normal throughout most of Brazil and Argentina during the October-November-December time frame. Any above normal precipitation is forecast to occur across Central Argentina. The point is that if there is a place to monitor for weather problems, it is NE Brazil!
- Multi-National exporters report that they are seeing Chinese buying interest but we cannot confirm any actual new US sales, but at least the ‘phone has been ringing. Based on existing Chinese tariff levels, it is the primary state buyers of Sino/Cofco which must be securing US commodities. There has been no indication that China is ready to drop their retaliatory tariffs (as the US won’t drop theirs) which is needed to allow private Chinese importers to fully return. The USDA announced another sale of soybeans to an unknown destination, rumoured to be China for 142,579 mt.
- Argentine corn bids for November/December are trading at a sharp discounts to the US Gulf. Nov Argentine corn is offered at -$0.10 with Dec at -$0.03. This compares the US Gulf at $0.52 over and December at $0.58 over. Argentine corn is $0.62/bu cheaper for November and $0.61 for December, how does the US compete until late January. US corn export estimates continue to retreat.
- The midday GFS weather forecast is drier for the entire Midwest with no additional snow into November. Temperatures will be variable with a frost likely for the E Midwest by the closing days of October. Dryness is noted through Friday with rains on the weekend followed by dryness during the 9-15 day period. The rains on the weekend look to range from 0.15-0.85”. The US corn and soybean harvest will gain speed in the coming weeks.
- Traders want evidence of Chinese demand before making new Chicago purchases. Pork, cotton and soybeans will be in the top of their shopping list. Beyond the political trade, US/S American weather is improving with US Gulf corn prices too high to stir any export demand. US demand rationing is domestic.