- Early selling in the soybean market found demand, that put soybean prices 2-3 cents higher at the close on Wednesday. Market news has been exceptionally slow this week, and China remains on holiday. In the soy product markets, soyoil was able to build on Tuesday’s recovery, and meal slipped lower on product spreading. The export sales report on Thursday will provide a new fundamental data point for what has so far been a very slow week of trade. Soybean export sales announcements through the week totalled 454,000 mt, and the trade estimates call for a weekly sales in a range of 1 to 1.3 million mt.
- Dec corn tested its contract low, recovered slightly thereafter, but again traded in just a three cent range. There is still no compelling evidence to support a major move in either direction in the near term, and instead corn looks to be a follower of neighbouring wheat and soybean markets. US ethanol production last week totalled a hefty 297 million gallons, up 4 million on the previous week and compared to 288 million on this week a year. Ethanol stocks, however, were boosted 35 million gallons, which was mostly a function of negative residual use, and so a sharp decline in export interest. Whether this is just temporary will be watched closely in the weeks ahead. Argentine origin is still by far the world’s cheapest feedgrain, but Gulf corn is otherwise offered competitively in Q1 2018. US exports will likely lag into late year, but we simply wish to highlight the rally in Black Sea grain prices. A bearish outlook requires a national US yield of 170 bushels/acre or better, while a bullish outlook demands a S American weather issue. Sideways trade will likely continue.
- EU and Black Sea wheat markets were quiet and little changed, while US futures fell 5-6 cents, basis Kansas/Chicago, amid the coming shift to wetter Central US weather. This will especially benefit the SRW Belt, which has been extremely dry over the last 45 days, and soil moisture is noticeably lacking. Much of MO, IL, WI and MI will see cumulative totals upwards of 2-3”, and it couldn’t come fast enough as SRW planting typically accelerates in October. Otherwise, fresh news remains lacking. Gulf HRW is, on paper, just $1/mt above comparable Russian origin, basis fob. The EU and GFS weather models are in fair agreement that better rainfall lies ahead for the driest areas of NSW (Australia) beyond Oct 10, but we note that precipitation recorded there in September totalled just .30”, which rivals the drought of 2007.