Mixed Signals from Outside Markets to Open Grains
A lower start is expected today, 3-5 wheat, 5-7 corn and 10 beans. The outside markets are sending mixed signals to the grains this am with crude oil and the $ both lower.
The Census Bureau August crush was as expected, 128.7 million bushels with oil stocks also in line, 2.589 billion lbs. Meal stocks were much larger than trade guesses, 413,000 short tons. Weekly export sales (000 omitted) were slow for wheat, 284 tonnes. Corn was in line, 548 tonnes, as were beans, 612 tonnes and oil, 6000 tonnes. Meal sales were slow, a total of 62 tonnes between the old and new crop years.
Egypt bought 120,000 tonnes of Russian wheat but nothing from the US. Some traders were hoping the US would capture some of this Egyptian business because ocean freight rates have fallen sharply recently, making US grain exports cheaper to distant destinations than previously.
There is a good chance for good rains in western Australian wheat areas the next couple of days but mostly dry weather is likely after that, keeping the outlook for a big Australian wheat crop this year in doubt. Scattered rain is forecast in parts of the Argentine wheat belt the next few days, especially over the weekend when up to 1 1/4" could fall over up to 70% of the area. Of course, one rain doesn't make a crop so more rain wll be needed again soon to ensure favorable growing conditions.
The US delta will enjoy at least 5 more days of good bean harvesting weather. The midwest saw isolated rain yesterday with light rain possible today through Monday in the west while the east remains mostly dry. Light rain is likely in the east early next week. The two main weather models diverge in their outlook about a week to 10 days from now with the US model calling for much colder temps and a possible frost in the northern part of the belt while the European model predicts much wetter conditions during this time. Either way, corn and bean harvesting should pick up soon, which could bring harvest pressure to bear on the market. ---Vic Lespinasse
