Strong Start Expected as Grains Continue to Follow Outside Markets
A strong start is indicated this am, up roughly 15 in wheat, 10-15 in corn and about 20-23 in beans. Traders will keep watching the equity and credit markets for direction in the grains, as was the case yesterday, and right now these markets point higher. The $ is lower while crude oil and the Dalian, China grain markets are higher, all supportive for our grain market.
The September NOPA (National Oilseed Processors Association) crush was a bit less than expected at 120.4 million bushels with oil stocks a bit higher than expected, 1.988 billion lbs, a little negative for beans and oil.
Weekly harvest progress will be out this afternoon with traders looking for around 50-55% of the bean crop to be harvested with 30-33% of the corn crop done. Average progress for this time of year is around 96% for beans and 41% for corn so we remain well behind normal.
Down in Brazil's Mato Grasso state, their largest bean producer, 5% of the beans have been planted vs about 2% average. There is a report Brazilian farmers have only bought 24% of their fertilizer needs as of last month vs about 70% usually for that time. This is probably due to farmers cutting back due to the very high cost of fertilizer and it could result in lower bean yields in Brazil this year. Sep Chinese bean imports were a record 4.13 million tonnes. China exported no corn during the month. Chinese corn exports the first 9 months of the year are down 96% vs last year while their bean imports are up 32% during this time over last year's pace.
Traders expect a higher corn and lower bean yield estimate in the next USDA crop production report on Nov 10. Every year since 1995 the corn yield guess in Nov has gone the same direction as the Oct yield guess. The yield this month went up vs Sep so it should go up next month as well. Traders expect a lower bean yield from the USDA next month for the same reason: Every year since 1995 but one the Nov yield has gone in the same direction as the Oct yield guess and this month the yield estimate went down so it will probably go down next month.
Australian wheat areas will be mostly dry the next several days. Argentine wheat areas saw up to 1" of scattered rain yesterday and up to 1/2" is forecast today before dry weather returns Wed-Sun.
The US southwest winter wheat belt saw up to 1.5" of welcome rain yesterday with up to 1.5" forecast today, favoring the central and western areas. The 6-10 day calls for above normal rain, which will be welcome. The midwest saw scattered rain in the west yesterday with mostly dry weather in the east.The west will see more scattered rain tomorrow, up to 1", with dry weather Thur-Sun. The east will see up to .5" scattered tomorrow with dry conditions Thur-Sun.
Weekly export inspections will be out at 10am US Central time.---Vic Lespinasse
