Export & Production Figures Plus Bearish Factors to Open Grains
A mostly lower start is expected this am, roughly 3-4 wheat, steady-1 corn and 5-7 beans. Crude oil is lower this am while the $ is higher, a bearish combination for the grains.
Weekly export sales were good for wheat at 652,000 tonnes. For meal, a total of 135,000 tonnes between the old and new crop years and for oil a total of 11,000 tonnes between the two crop years. Corn sales were in line: 568,000 tonnes. Bean sales were slow at 471,000 tonnes.
Stats Canada estimated all wheat production at 27.27 million tonnes, durum 5.07 million, oats 4.32 million, barley 11.22 million, and canola 10.87 million. The all-wheat estimate was higher than expected while the canola figure was a little lower than trade ideas. The other numbers were generally in line.
FC Stone estimated US corn production at 12.026 billion bushels vs the USDA Sep guess of 12.072 billion. FC Stone's bean guess was 2.889 billion vs the last USDA guess of 2.934 billion. FC Stone's yield estimates were 151.7 bushels per acre for corn and 39.4 for beans.
3500 oil and 119 meal were delivered this am with no large commercial stoppers. 300 million lbs of bean oil were used in August to make biodiesel fuel, up from July's 287 million but way down from Aug 2007, when 376 million lbs were used, according to this morning's monthly oil stocks report.
The USDA attache in Canberra, Australia cut his wheat production guess from 22.4 million tonnes to 21.6 million. The USDA currently is 22 million. They will put out their new estimate Oct 10.
A damaging freeze is possible in Argentine wheat areas this weekend and in parts of the Australian wheat belt Monday am. Welcome rain is forecast in parts of the Argentine wheat belt tomorrow after beneficial rain fell yesterday but amounts are expected to remain light. Rain is forecast in some of the Australian wheat belt today through Saturday.
The US southwest winter wheat belt will be dry today through Saturday with up to .75" of rain forecast Sun-Mon. The 6-10 day calls for warm and wet weather, which will be welcome. The US midwest might have had a freeze in northern areas this am as temps dipped into the low 30's. A freeze is still possible in the north the next couple of mornings. Good harvest weather is forecast in the western half of the belt the next few days but up to 1" of rain is possible there Sun-Tue. The eastern half of the belt will be dry today through Monday with rain expected Tue-Wed. The 6-10 day calls for wet weather in the west and below normal rain in the east.
The Senate passed the bail out bill last night and the House will vote on its version of the bill tomorrow. All the markets will be watching this vote. If the bill passes, it is likely to be viewed as friendly for commodities, including grains, since it will be inflationary. If the bill doesn't pass, it will probably have a bearish impact on the grains. ---Vic Lespinasse
