• Chicago mixed at midday with row crops under harvest pressure; GFS midday weather forecast takes a hurricane into NOLA on Sept 28 (confidence low).

• The Gaza war appears to be broadening with Israel’s attack on Lebanon overnight. The energy markets have failed to sustain an initial rally, but a broadening Mideast war must be monitored in terms of crude oil supplies and supply chains in general. World freight rates are back rising adding cost to importers and end users.

• The International Grains Council (IGC) lowered their world wheat production estimate to 798 million mt, down 1 million amid a cut of the EU soft wheat production to 122 million mt while raising Australia to 31.8 million mt. World corn production was lowered 2 million to 798 million mt as EU corn production was cut 59.8 million mt. This was a downward revision from 61.4 million last month.

• Chicago grain futures are mixed at midday with harvest hedge/chart selling pressuring row crop futures while wheat values rally following a weeklong decline. The wheat price bounce appears to be short covering ahead of the weekend amid uncertainty surrounding the Russian war against Ukraine. And private analysts are trimming 2024 Russian wheat (and total) crop estimates on late harvests due to excessive rains across Siberia. The Russian Government has declared 5 crop areas as emergencies due to excessive rainfall which has produced widespread flooding. The area impacted is estimated to contain 1.1 million acres of crops. Spring wheat harvests are being degraded to feed, but this area does not have large livestock herds, and the grain must be transported east. Talk is growing that the final 2024 Russian wheat crop will end up between 79.5-81.5 million mt. This will trim Russian 2024/25 wheat exports to under 45 million mt. We look for a firm wheat close but hedge related pressure in corn and soybeans on the fast and expanding harvest pace.

• Chicago brokers report that managed money has sold 3,300 contracts of soybeans and 5,100 contracts of corn, while buying 3,800 contracts of wheat. In the products, funds have sold 2,100 contracts of soyoil and 3,400 contracts of soymeal.

• FAS’s daily reporting system indicated that China purchased 121,000 mt of soybeans in the 2024/25 crop year. We believe that China used the early Chicago break to secure 3-5 cargoes of US soybeans for November this morning.

• The oil share spread has been a significant rally this week based on the return of US soyoil export demand and 3 new US crush plants that will come online in Q4 that would add to domestic US soy supplies. The new crush plants are owned by Bartlett, Norfolk Crush, and CGB/Minnesota Soybean Processors. The plants are expected to begin operations in October/November and add 340,000 bushels daily to US crush capacity. Note that it took Platinum Crush (May/June) more than a month to get up to normal daily capacity last summer, so it will take considerable time to fully bring these 3 new plants online.

• The midday weather forecast is wetter across the Southern US as a hurricane takes aim on NOLA on September 28. It is too far out in the forecast for a specific hurricane forecast with other models now showing such landfall. Yesterday, the midday model had a hurricane targeting Tampa, so be prepared for sizeable changes in tropical storm positioning.

• The S American forecast is 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. Extreme heat persists for another 10-12 days.

• The expanding/ advancing Central US harvest has corn/soy under pressure while wheat rallies on falling Russian production fears and the ongoing dryness to seed the SW Russian new wheat crop. Soybeans won’t break until needed rain drops across Northern Brazil.

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