- As expected, today has seen little action in the run unto tomorrow’s USDA crop report. Nervous traders have probably reduce position size ahead of the report in a “risk off” mood. We have reported in recent days our view that global crops show a stock rebuild potential and despite some reduction in predicted northern hemisphere output we continue to stare at increased total supplies of both grains and oilseeds, which will impact S&D and in turn prices. Our S American contacts advise us directly that oilseed planting intentions are for increased acres assuming weather permits, and hot on the heels of increased northern hemisphere output it would seem likely that our high school economics lessons will prove correct and drive prices in a downward direction, unless of course we can see demand escalation of some magnitude (from where, we know not).
- Lanworth, the Reuters crop forecasting arm, today increased global corn output to 942 million mt (from 940 million mt) due to improved prospects for crops in both the US and Ukraine. Ukraine output was increased 3% to 26.4 million mt as a consequence of “moderately wet and unexpectedly cool” late August weather. The US output was put at 13.396 billion bu based upon a yield of 152.2 bu/acre. The latest figure is an increase from their last estimate of 13.330 billion bu and 151.6 bu/acre. Their outlook for soybean output was less optimistic with US production trimmed marginally to 3.113 billion bu (from 3.114 billion bu). Global wheat and soybean output were left unchanged in their latest deliberations (at 702 million mt and 278 million mt respectively).
- Tomorrow looms large although historically it is the next, October, report which has produced market upsets. However, the USDA has in recent times had sufficient lack of predictability to see an apple cart or two being upset and tears shed as their reports are read.