CORN

• Most of the US corn belt looks to have good weather for the next week or so. This should keep harvest pace moving along quickly, which might keep hedge pressure on the market.
• Ukraine’s corn exports are expected to decline to 21.7 mmt vs 29.4 mmt last year due to heat and dryness. This should lend some support to US corn exports.
• The French corn harvest is vastly behind last year’s pace, sitting at 6% complete, compared with an average of 44% for this time of the year. This is due to overly wet weather. In fact, it is being said that they have had the wettest September in 25 years.
• According to the Buenos Aires Grain Exchange, Argentine farmers have been forced to stop planting corn in the western regions due to overly dry conditions. Their planting is 19% complete, up 5% from the previous week. Despite the pause, the exchange did not adjust the planted acreage estimate, which sits at 6.3 million hectares (though that would still be down 22% from last year).

SOYBEANS

• Palm oil prices have rallied 2.8% on Friday and 16% since the middle of September, while canola has risen about 14% since mid-September. This increase in world veg oil prices has been providing some support to US soybean oil futures and has also improved crush margins.
• At midday, crude oil is trading near neutral after a lower start to the session. This comeback in price has lent some support to the grain complex as well. Further uncertainty surrounding the war in the middle east has been adding volatility to the crude market.
• Yesterday there were rumors of China buying soybeans, with purchases of three cargoes from the US and three from Brazil. For the week their total is said to be 18-20 cargoes. An increase in Chinese demand would certainly benefit the US soy complex.
• The extended forecast for the drier central areas of Brazil continues to show improved chances for rainfall. While the wet season may be arriving later than normal, some estimates are pegging total soybean production in South America will increase by 19 mmt over last year (if the weather situation continues to improve).

WHEAT

• At midday, the December contract of all three US futures classes has traded above the 100-day moving average for the third session in a row. This may now be an important support area and may also indicate a more bullish trend for wheat.
• Russia’s ag minister is believed to have called a meeting on Friday with major grain exporting companies. This is likely to discuss a possible export quota. In related news, the Russian government is reported to have decreased their estimate of the country’s wheat crop to 83 mmt. Previous estimates ranged from 84-86 mmt, and for reference last year’s crop totaled 92 mmt.
• Continued tensions in the Black Sea region are adding war premium to the wheat market. The recent missile attacks against grain vessels and infrastructure have not only led to more uncertainty but are said to have resulted in soaring insurance premiums as well. Russian FOB export values have also recently been increasing.

Author

Brandon Doherty