- Chicago ag markets are mixed at midday with soybean/wheat futures stronger while corn values sag. China continued its daily purchase program in taking another 238,000 mt of US soybeans while 132,000 mt was sold to an unknown destination. US weekly export sales totals on (Friday morning due to the Monday US holiday) will be huge for US corn/soybeans once again. China has stolen the show on US corn/soybean purchases since mid-July and Gulf export elevations through yearend are mostly filled.
- China’s State trader, SinoGrain, have been the primary buyer over the past week as they take soybeans for their reserve and parcel out supplies to crushers for a later date. Recent Chinese corn demand has been for loading in February forward suggesting that China does not have an immediate need for US corn. Chicago futures might weaken into the close with funds banking profits on long futures as soy has rallied for 11 consecutive days with an RSI that is extremely overbought. Fund managers desire to take some money off the table ahead of Friday’s USDA September Crop Report. It is a question of timing.
- Chicago brokers estimate that funds have sold 2,200 contracts of corn while buying 3,100 contracts of soybeans and 4,100 contracts of wheat. In soy products, funds have bought 1,900 contracts of soymeal while being flat in soyoil.
- Funds continue to add to a net long soybean position which is estimated to be 188,000 contracts as of today. Funds are nearing their longest net soybean position looking backwards to June of 2016 and February 2018 when fund length peaked above 200,000 contracts. Heading into a new harvest, the fund length must be monitored if NASS finds a US soybean yield that is larger than expected. It is yield that will determine if China’s ongoing purchase program needs to be rationed.
- Weather forecasts are improving for rainfall across Australia, Argentina and Western Europe for winter grain seeding. The forecast remains arid for Ukraine and SW Russia. However, the 16-30 day forecast offers improved rain chances for the Black Sea during the last 10 days of September. There remains time for moisture to seed European and Black Sea winter grain crops ahead of winter.
- A corridor of rain is falling across the S and C Plains into the W Midwest currently. The midday forecast calls for additional rain in this corridor of 0.5-1.50″ before a period of warm/dry weather returns on Friday and through next week. Blazing sunshine will warm temperatures into the 70′s/80′s and produce a favourable end of the 2020 growing season. Increasingly, US farmers desire warm/dry weather to start their corn harvest operations and seed winter wheat. The forecast maintains seasonal temperatures and near to below normal rainfall into September 24.
- US soybean futures are a function of ongoing Chinese demand. We hear that China has booked another 3-5 cargoes of US soybeans today, keeping their daily purchase program alive. Corn/wheat values cannot sustain a decline amid the ongoing soy rally. Cash basis pushes for C IL old crop soybeans has $10.00 being paid for quick shipment as a bridge to the new crop. $3.60 Dec corn futures digest a 174-176 bushels/acre US corn yield while $9.75 November pegs the soybean yield at 50-50.5 bushels/acre. NASS will determine if these estimates are correct. It is hard to be overly long ahead of harvest.