- Grains sag on charts and harvest pressure; Soybeans bounce with US soyoil export sales; Volume slows at midday.
- Chicago grain futures are lower at midday with wheat futures leading the decline. The expanding Midwest harvest and chart-based selling has pushed corn lower. Soybeans have traded on either side of unchanged with stronger than expected weekly export sales offering support. US wheat futures are pulling back for chart-based reasons as Russian wheat fob prices hold stubbornly at $216/mt, a price level that has existed for weeks. The Russia wheat export pace has been record large due to their price competitive position. EU/US and Aussie fob wheat offers are holding well above Russia, but dryness is starting to gain the attention of the Russian farmer with a calendar need to get seed in the ground ahead of winter. SW Russian farmers like to have their winter wheat crop seeded by the middle of October and the 2-week forecast offers limited rainfall. The Black Sea drought is ongoing and could adversely impact new crop wheat without a pattern change. We look for a lower Chicago close on US harvest considerations with support noted below $4.04 in December corn futures and below $5.60 in December Chicago wheat.
- Chicago brokers estimate that managed money has sold 4,300 contracts of wheat, 6,100 contracts of corn, and 1,200 contracts of soybeans. In the products, fund managers have sold 1,300 contracts of soymeal while buying 2,900 soyoil.
- FAS’s daily reporting system was void of new US export sales. Chinese demand is lacking for US soybeans following their Autumn Festival holiday.
- For the week ending September 12, the US sold 9 million bu of wheat, 33.4 million bu of corn and 64.2 million bu of soybeans. Soybean sales were larger than expected with the grains disappointing. For their respective crop years to date, the US has sold 405 million bu of wheat (up 88 million or 28%), 559.4 million bu of corn (up 97 million or 21%), and 588 million bu of soybeans (down 37 million or 6%). We maintain that WASDE is too low on 2024/25 US corn and wheat exports, and too high on soybean exports. However, the US soybean export pace has scored solid strides as China has boosted purchases in the past 6 weeks. We estimate that China has now purchased more than 10 million mt of US 2024/25 soybeans or about 45% of their projected annual total with the crop year just starting.
- The US also sold 46,700 mt of US soyoil with Canada and Mexico the largest weekly buyers. US 2023/24 soyoil crop year commitments stand at 280,300 mt. We look for WASDE to trim its 2023/24 soyoil export estimate of 650 million pounds slightly, but a large share of today’s sales is being shipped out. US Gulf soyoil is priced at parity or slightly below crude palmoil which will enhance future US soyoil exports. The enhanced renewable diesel and export demand looks to further drop US 2023/24 soyoil end stocks. The demand bull story for soyoil is building on strong domestic demand.
- The midday weather forecast is further south with rainfall across the Western and Southern Plains. A hurricane is forecast to push NE across Tampa Bay on 29 September. No frost/freeze is indicated with the Midwest harvest to make rapid progress through October 4.
- The forecast is a touch drier with this run less enthused about breaking out rains across Northern Brazil in the 11-15-day period. Some light rain would fall across Northern Mato Grosso on October 2-4, but that is too far out for any confidence. Rainfall totals would range from traces to 0.5” during early October. A deepening drought grips N Brazil with extreme heat to persist.
- The expanding/advancing Central US harvest has corn under pressure while wheat sags on the premium of US/EU fob wheat vs Russian offers. Soybeans won’t break until needed rain drops across Northern Brazil.