- Chicago markets are mostly weaker in tepid volume at midday. Midday forecasts are little changed, with favourable dryness offered to the US Corn Belt into Nov 20 and with a vast improvement in Brazilian soil moisture forthcoming.
- The trade is also losing interest in waiting on confirmation of Chinese demand for US ag goods in the near term. At this week’s import expo in China, Chinese President Xi discussed the need for the US and China to eliminate tariffs simultaneously in proportion to trade progress made so far. This raises confusion as markets are not fully aware of the details of mid-Octobers Phase One agreement. Chinese demand needs to be seen and felt before premium is added.
- Egypt’s GASC this morning purchased 175,000 mt of French and Russian wheat at an average fob price of $215/mt vs. $218 last week. This follows the trend of weaker EU cash prices in the last week, and a pausing of the rally in Russian cash wheat prices. EU wheat futures have rallied €1.00/mt ($0.03/bu) following purchase of French origin but spot EU wheat remains €3.25/mt off highs posted in mid-Oct.
- Other news is lacking. Sources do indicate that Australian wheat in South Australia in competitive with Russian origin into far Southeast Asia on a fob basis. Recent rainfall in New South Wales and Queensland in Eastern Australia will do nothing to boost wheat yield, but will improve pasture conditions there. And domestic Australian markets are benefitting from newly harvested wheat and barley crops.
- Ahead of the USDA’s November WASDE, the market’s average guess on US corn yield is 167.2 bushels/acre, vs. 168.4 in October. The average guess on US soy yield is 46.6, vs. 46.9 in October. Such yields, if realised, are viewed as bearish corn and neutral beans. Potential sizeable Chinese demand for beans this winter will remain priority number one, while near-unchanged US corn product ion requires a major improvement in export demand to keep spot corn above $3.80.
- The midday GFS forecast keeps meaningful snowfall in the next 48 hours a bit northward into southern MN, WI and northern Ml. No additional meaningful rain/snow is then projected is featured throughout the next two weeks.
- In S America, the GFS weather forecast is slightly wetter in southern and western Argentina but otherwise unchanged. Note that soaking rainfall of 2-5″, which is seasonally normal, will impact a vast majority of Brazil’s Soy Belt into Nov 15. Concern over lingering dryness is shifting to Argentina, where the correlation between precipitation and early-planted corn yield rises substantially in December. A wetter pattern is hinted at Nov 16-20. It is important that this moisture materialises.
- Ag markets lack new input to drive price lower or higher. The global market will have access to Brazilian beans in just 90 days.