- Friday’s USDA October Crop report looms, and the overnight trade has been mixed. So far this week the markets have been offered very little information for directional guidance, other than the constant flow of anecdotal yield reports. Based on the reduction in wheat acres, the trade appears prepared for a slight drop in both corn and soybean acres in October. Soybean yields are expected to inch higher based on favourable late season weather and strong early yields, while the corn yield could slide on mixed field data.
- Ahead of the report, December corn looks to be willing to test it’s 200 day moving average, just under $4, November soybeans are holding right in the middle of a trading range that has been carved out over the last six weeks, while December wheat is holding just under it’s 100 day moving average. All three markets await fundamental guidance from the USDA, while cash basis remains seasonally weak from harvest pressure.
- The US soybean crop condition rating on Monday rose 2 points to 64% good/excellent – 9 points under last year. National ratings have held under last year all season, but began to improve starting in mid-July. Producers indicate that the stable ratings and the generally favourable late summer finish has provided surprisingly better yields across the Midwest. Many fields across IL, IA, and MN have produced record setting yields.
- 27% of the US corn crop and 42% of the US soybean crop had been harvested through last Sunday evening. The corn harvest is running slightly behind the 5 year average of 32% while the soybean harvest was 10 points above average. Winter wheat planting progress advanced 18 points last week to 49% complete, and was just under the 5 year average of 51%.
- China remains on holiday through Thursday, and the trade will be watching for sales announcements in the days following. S American offers on soybeans have dried up with Brazilian stocks now seasonally tightening, while farmer selling in Argentina has slowed as producers await on the October 24 the presidential election.
- PM – update – Dec ’15 wheat pushed through its 100 day moving average, which added further upside pressure, whilst corn broke its 200 day average and the September highs and soybeans are at the top of their six week range – all looking firmer Tuesday. Aside from technical chart levels it is difficult to find a fundamentally market supportive stance. It would take a marked (1 or 2 bushels/acre in soybean or 4 to 5 bushels/acre in corn) drop in yield to justify further rallies in price.