- Stats Canada wheat/oats crop size supportive; China says to slow sorghum/barley imports into corn harvest; GFS weather forecast slightly drier at midday.
- Firm interior Russian cash price rallies wheat futures: Chicago grain futures are mixed at midday with wheat futures higher, soybean futures lower while corn trades either side of unchanged. Wheat is higher on rising interior cash bids while better than expected rain across Northern and Central IL (along with the prospect of showers into Friday) pressured Chicago soybean futures. Corn has followed soy amid the news that China will delay its purchase and import plans of barley/sorghum until its farmers are done with their autumn harvest.
- China alerted the feedgrain market last spring that their imports would be in seasonal decline into harvest. China (like Turkey/India) is trying to support domestic cash oilseed/grain prices to boost farm income. The fall in farm income is a global problem, not domiciled on US farmers. In fact, Brazilian farmers are entering their new soy planting season with losses for the first time since 2008/09 which will tap down on spring seeding expansion. Brazilian farmers will plant first season corn on reduced acres that meets domestic demand. Look for a mixed Chicago close with liquidation ongoing on September futures. There are 424 contracts of Chicago wheat, 6 contracts of oats, 15 contracts of corn, 10 contracts of soybeans, 415 contracts of soyoil, and zero soymeal that are registered for delivery on Friday.
- Chicago brokers estimate that the managed money has bought 3,700 contracts of wheat and 2,900 contracts of corn, while selling 1,200 contracts of soybeans. In the soy products, funds have bought 2,300 contracts of soyoil and sold 2,100 contracts of soymeal.
- Stats Canada pegged their total 2024 wheat crop at 34.4 million mt, up 1.3 million from last year with the gain coming in durum wheat. The 2024 Canadian durum wheat crop was up 1.93 million mt or 47% to 6.022 million mt. Canadian spring wheat production fell 2.5% or 200,000 mt. Stats Canada estimated the 2023 all Canadian wheat crop at 32.9 million mt, 1 million more than WASDE. We are unsure whether WASDE will follow Stats Canada in raising old crop Canadian wheat production. 2024 Canadian canola production was estimated at 19.5 million mt, up 300,000 mt more than last year. Oat production was placed at 2.91 million mt, up far less than expected a gain of only 260,000 mt from last year. The Canadian oat/wheat data was bullish, with canola neutral to slightly negative vs expectations.
- The USDA reported that 264,000 mt of US soybeans were sold to China, 100,000 mt of corn to Columbia and 165,735 mt of corn to Mexico. There are rumours that China has secured an additional 3-5 cargoes of US soybeans this morning.
- US weekly ethanol production was 315 million gallons, up 6% on last year and a record for the week. US ethanol stocks were steady at 990 million gallons. We would argue that the WASDE 2023/24 corn grind for ethanol is too low by 15-20 million bu and that an upwards adjustment will be made in September.
- The midday GFS weather forecast is drier than the overnight solution with light rain to linger across MO, IA, and IL with totals of 0.1-.7”.
- The forecast beyond Friday looks arid with limited rain and warming temperatures. The 11-15-day maintains this drier trend. Thus, it is important as to the locations and amounts of rain that drop in the next 60 hours. If you miss this rain, a drier slate is ahead that lasts for the next few weeks. Temperatures stay elevated for a few more days before turning more seasonal on Friday and the weekend.
- September corn futures are under liquidation pressure that will cease on Thursday ahead of first notice day. Soy futures are in decline on the prospect of Midwest rain over the next 2 days before an extended dry period of weather. Reports of IL/IN/OH and IA corn foliar diseases are becoming increasingly widespread. China slows feed grain imports into late October, but they are expected to import 23 million mt of world corn in 2024/25, it is just a question of from the US or S America. Russian interior wheat prices appear to have bottomed, and exporters are chasing cash prices higher making replacement more costly. Corn and wheat will continue to outperform sagging soy.