Written Commentary
Grains Outlook
Grains are mixed to lower. SX is down 3 cents and near 10.16. SMZ is near 342.8. BOZ is near 33.11. Funds are buying soymeal in case La Nina lowers 2021 South America soybean crops. CZ is down 1 cent and near 3.68. WZ is down 1 cent and near 5.56. KWZ is unchanged and near 4.92. Russia wheat areas need rain. South America soybean areas also need rain. US stocks are higher. US House passed a new spending bill that could avoid a government shutdown. Crude is higher. US Dollar is mixed. Gold is lower. Higher US Dollar is offering resistance to Gold prices.
Chinese Ag futures (January) settled down 34 yuan in soybeans, down 28 in Corn, down 7 in Soymeal, down 162 in Soyoil, and down 160 in Palm Oil. Malaysian palm oil prices were down 39 ringgit at 2,918 (basis December) at midsession on weaker Dalian vegoil futures, ideas of rising output.
Potential for good US Midwest harvest weather over the next 2 weeks could be offering resistance to corn and soybean prices. Near record US Q4 corn and soybean exports offers support. Fact US farmer may be looking to store as much as possible the 2020 corn crop offers support to corn prices.
The 6 to 10 day forecast for the US Midwest continues with dry weather for the week across the region but, transitioning to seeing a front come through over the weekend and another front early next week. Rainfall amounts will be light to moderate and favor the northeast Midwest. Temps will be above average over the next 5 days but, with those fronts, temps will be falling to below average into early next week.
No major changes in South America. Showers and a few thunderstorms are still expected in center west and center south Brazil over the near term which will begin to moisten the topsoil moisture a little. Argentina could also see some scattered showers. Greater rainfall will be needed though to promote better flowering conditions.
The changes in Europe shown this evening by the GFS model run and in the European model run at mid-day suggest changing trends and an end to chronic dryness that has been prevailing in many areas from France into Germany. Dryness is still prevailing through Oct. 8 in the far southeast of Europe and from most of Russia eastern Ukraine into Kazakhstan.
USDA estimates World 2020/21 soybean exports near a record 166.3 mmt versus 165.8 last year. China imports are estimated near a record 99.0 mmt with some feeling they will take over 100.0 mmt. This suggest they need to buy 8.2 mmt monthly. USDA estimates Brazil exports at 85.0 mmt versus 93.5 last year. US 57.8 versus 45.7 last Year.
USDA estimates World 2020/21 corn exports near a record 186.0 mmt versus 170.3 last year. China imports are estimated near 7.0 mmt with some feeling they will take over 20.0 mmt. USDA estimates Brazil exports at 39.0 mmt versus 34.0 last year. Ukraine is estimated near 32.5 versus 30.5 last year. US 59.0 versus 44.8 Last Year.
USDA estimates World 2020/21 wheat exports near 189.4 mmt versus 190.3 last year. USDA estimates Russia exports at 37.5 mmt versus 34.2 last year. EU at 25.5 versus 38.4 last year. Canada 25.0 versus 24.6 last year. Australia 19.0 versus 9.5. Ukraine is estimated near 18.0 versus 21.0. US 26.5 versus 26.2.
On Tuesday Managed funds were net buyers of 3,000 contracts of SRW Wheat; were net even in Corn; sold 2,000 Soybeans; bought 2,000 Soymeal, and; net sold 4,000 Soyoil. We estimate Managed Money net long 28,000 contracts of SRW Wheat; long 66,000 Corn; net long 223,000 Soybeans; net long 63,000 lots of Soymeal, and; long 91,000 Soyoil.
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