Written Commentary
Grains Outlook
USDA report day. Grains are higher. SX is up 7 cents and near 10.58. SMZ is near 362.7. BOZ is near 33.36. CZ is up 4 cents and near 3.91. WZ is up 7 cents and near 6.03. KWZ is up 7 cents and near 5.36. Many expect increase grain futures volatility post USDA report. US stocks are higher. US Dollar is lower. Crude is lower. Gold is higher.
For the week, SRW Wheat prices are up roughly 29 cents; HRW up 27; HRS up 16; Corn is up 11 cents; Soybeans up 38; Soymeal up $12.00, and; Soyoil up 170 points. Crushing margins are up 5 cents at $1.06; Oil share is unchanged at 31%.
Chinese Ag futures (January) settled up 109 yuan in soybeans, up 74 in Corn, up 175 in Soymeal, up 234 in Soyoil, and up 258 in Palm Oil. Malaysian palm oil prices were up 33 ringgit at 2,921 (basis December) at midsession on export hopes, output concerns.
The Southern Plains over the 6 to 10 day period has below average rainfall for the region with any rains being light and favoring OK and E KS. Temps will be running above average through early next week before falling to average and below for the remainder of the period.
The Brazilian growing regions has light to moderate rainfall for the growing regions central/north over the next 5 days. The 6 to 10 day forecast has moderate rainfall for growing areas north with 85% coverage. Little rainfall is seen for the southern growing areas. The Argentine growing regions has mostly dry weather over the next 10 days with any rainfall of light to moderate amounts falling in Buenos Aries.
BLACK SEA REGION has not much change occurred through day nine (October 16). Showers and periods of rain impact southeastern Europe through western Ukraine to Belarus and far northwestern Russia. Eastern Ukraine, Russia’s Southern Region and Kazakhstan were dry. Two very important changes are expected over the next two weeks. First, the deep trough of low pressure over Europe is expected to prevail through the coming week to nine days and some of the smaller weather disturbances moving through this trough will get spun off toward Russia. These small disturbances will bring “opportunity” for rain to the dry areas of the middle and lower Volga River Basin, eastern Ukraine and Russia’s Southern Region during the October 17-24 period.
The second change is the potential for the trough in Europe to retrograde back to the west during the last week to ten days of October and if that occurs the chances for follow up rain in eastern Ukraine, and Russia’s Southern Region is expected to be very low for a while.
Average trade guess for US 2020 corn crop is 14,808, range 14,604-14,963. USDA is 14,900
Average trade guess for US 2020 soybean crop is 4,282, range 4,182-4,350. USDA is 4,313
Average trade guess for US 2020/21 corn carryout is 2,113, range 1,859-2,333. USDA is 2,503
Average trade guess for US 2020/21 soybean carryout is 369, range 285-460. USDA is 460
Average trade guess for US 2020/21 wheat carryout is 887, range 830-917. USDA is 925
Average trade guess for World 2020/21 corn carryout is 300.1 mmt, range 291.3-305.0. USDA is 306.7
Average trade guess for World 2020/21 soybean carryout is 91.6, range 88.0-94.1. USDA is 93.6
Average trade guess for World 2020/21 wheat carryout is 317.2, range 310.9-322.0. USDA is 319.3
Range of guess for US 2020 soybean yield is 50.5-52.5 with an average of 51.6 versus USDA 51.9. US soybean export commit is already 70 pct of USDA goal. Brazil rainfall to date is below normal nut rains are forecasted to improve.
Range of guess for US 2020 corn yield is 174.8-179.2 with an average of 177.7 versus USDA 178.5. Corn futures lag the recent rally in soybean and wheat. USDA is expected o drop Black Sea corn crop2.4 mmt. Lack of US and Argentina farmer selling is supportive.
Wheat futures are caught between talk of tighter World 2021 supply outlook and lack of any nearby shortage. US south plains, Russia and Argentina crop areas need a rain.
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