Good afternoon friends!
Corn 348’4 -4’0
Soybeans 1002’2 +10’0
Chi Wheat 403’4 -11’2
KC Wheat 413’4 -8’0
Cotton 68.66 -.22
**Crop progress reports were just released, I go over them in the audio podcast. Listen below or on your phone.
Soybean markets are on the move as Nov tests 10.00 and 2017 contracts trad at levels not seen since late August. All of this happens while the corn and wheat markets get leaned on all day, Chicago wheat especially as it re-takes its place as whipping post. Cotton had a very slow day with little trade on either side of 69 cents. Dec 16 is trading even with Dec 17.Nothing different from last Monday to this Monday other than a stronger dollar and more certainty regarding
Its hard to say whats driving the selloff in wheat. There is little in the way of news flow, maybe the market is gearing up for its first crop rating of the year. It is dry out west and winter wheat acreage is looking to come in where it was in the early 1900’s as far as plantings are concerned. The market can pretty much guarantee a carryout cut at this point. China wheat production last year was BRUTAL, no matter what they say. China stepped up its wheat buys in September, buying 431,810 MT of wheat, a 109.01% increase from year-ago. Australia and the U.S. provided the bulk of the shipments to China. HRW continues its push back against the Chicago contracts, which tells me this is nothing more than long liquidation. I would be buying the break below 450 in Chicago or KC July.
Export inspections through last Thursday were weighted heavily towards soybeans. Bean shipments through the period totaled 101 Mil Bu, up 9 Mil from the previous week and the largest since November 2014 are near record large. Corn and wheat shipments declined as a result, with corn inspections totaling 21 Mil Bu, vs. 35 Mil a week ago, and wheat shipments totaling just 9 Mil, vs. 17 Mil a week ago. For their respective marketing years to date, the US soybean sales stand 11% bigger than last year; up 75% for corn and up 27% in wheat bushels shipped from a year ago. This break in price should see support, mainly from export competition.
Weather remains one of the only real tradable factors at this point in the crop growing year, and that comes from South America. Models show more moisture to be expected across Brazil in the extended period, but overall maintains a pattern of normal/above normal rainfall across the whole of South American into early/mid-November. A seasonal pattern of near-daily tropical showers will be established in Central and Northern Brazil in the weeks ahead, while moderate/heavy rainfall will work across Argentina and S Brazil every 3-4 days through Nov 3. Perhaps more importantly, the models in recent days have trended cooler in Brazil, and so extreme heat will be absent during the first part of the growing season. So far, there is little to write home about regarding South American yields. The market should look at this as “supply friendly” for now.
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