Mixed Open in Grains Possible as Outside Markets Send Changing Signals
A mixed start is indicated this am but even this is only tentative as traders continue watching the outside markets for direction and they are sending changing signals currently. The $ is higher but not nearly as much as it has been the last couple of days. Equities are lower but not that much and they have recovered from early lows. Crude oil was a little lower before but now it is a little higher. Grain prices were mixed but mostly better overnight and we could see a similar start this am.
Weekly export sales were a little on the light side for wheat, 384,000 tonnes. Oil was poor, only 3300 tonnes and beans were about as expected, 784,000 tonnes. Corn was toward the upper end of trade ideas at 790,000 tonnes while meal was very good, 263,000 tonnes.
The Census Bureau Sep crush was slightly below trade ideas, 125.7 million bushels. Despite this lower crushing pace, oil stocks were over 100 million lbs higher than expected, 2.528 billion lbs. Meal stocks were less than indicated, 294,000 short tons according to one wire service, 289,000 according to another wire service. This crush report will be negative for beans and oil this am.
Chinese bean imports the first half of Oct were only half the level of the last half of Sep, 723,000 tonnes vs 1.35 million tonnes. Traders had expected total Oct imports of 2-3 million tonnes, a figure that is now unlikely to be achieved.
A high pressure ridge has moved into northern Brazil and it could cause hot and dry weather the next week or more in Mato Grasso, Brazil's largest bean producing state, stressing newly planted beans there. Argentine wheat areas were dry the last 24 hours with more of the same forecast today through Monday, followed by scattered, welcome rain Tue-Wed.
The southwest US had rain or snow the last 24 hours with light precipitation expected today and mostly dry weather Fri-Tue. The western corn belt had up to 3-4" heavy rain in some areas the last 24 hours, while the eastern half of the belt was dry. Light rain is forecast in the west today and tomorrow, followed by welcome dry weather. All this moisture will further slow harvesting of corn and beans. The east will see up to 1" of rain today-tomorrow with lighter amounts Saturday. The 6-10 day calls for below normal rain, which will be welcome as farmers try to continue harvesting. ---Vic Lespinasse
