Target Futures
Quarterly Stocks Figures Bullish Wheat; Bearish Corn, Beans
A mixed to lower start is likely this am, down roughly 10 or more in beans, steady corn and wheat. Crude oil is higher this am but so is the $, sending mixed signals to our grain market. Chinese markets remain closed all week for their autumn festival holiday.
The USDA quarterly stocks numbers were bullish wheat at 1.857 billion bushels but bearish corn and, especially beans at 1.624 billion and 205 million, respectively. The bean number was much higher than expected due to the USDA revising 2007 bean production higher by 91 million bushels to 2.676 billion bushels. Wheat production showed mixed results with all wheat production 2.500 billion bushels, all winter wheat 1.868 billion, hard red winter 1035 billion, soft red winter 614 million, white 219 million, spring 547 million and durum 85 million. The all wheat and spring numbers were higher than expected while most of the other numbers were about as expected.
The weekly crop rating showed corn maturity was still way behind normal at 52% vs 79% average. Bean maturity was 68% vs 81% average. Corn and bean harvesting were well behind normal, 9% vs 21% average for both.
Deliveries this am were much larger than expected, 540 meal and 4200 oil. Dreyfus put out 300 of the meal. These larger than expected deliveries could pressure the nearby spreads in these pits today.
FC Stone puts out their Oct crop production guesses tomorrow am.
Much needed rain is possible in Argentine wheat areas tonight through Friday. Beneficial rain is possible in parts of Australia's wheat belt later this week, mainly New South Wales. Lows the next couple of mornings in the midwest US could fall to freezing levels but little damage is expected as only a light freeze, if any, is likely.
Mostly favorable harvest weather is forecast for the midwest this week. The 6-10 day forecast calls for warmer temps with wet weather in the west and below normal rain in the east. Good harvest weather is forecast for the delta the next 5 days or longer. ---Vic Lespinasse
Bearish Factors May Keep Grains Under Pressure All Day
A lower to sharply lower start is expected following big overnight losses as financial turmoil continues to rack all the markets, including commodities. Crude oil is sharply lower and the $ is very strong, a bearish combination for the grain market. Malaysian palm oil fell 188 ringgit today. The Dalian, China grain futures market is closed all week for their annual autumn festival. The early call is 15-20 lower wheat, 15 down in corn and 30 lower beans.
Much needed, very beneficial rain with high coverage fell in western Australia over the weekend, up to 1.25". More is forecast today, up to .75". Mostly dry weather is forecast after today for the rest of the week. Argentine wheat areas had up to 1.5" of rain over the weekend in parts of the belt. More rain is still needed, however, especially in western parts of the belt. Dry conditions are forecast today through Wednesday with rain returning Thursday.
The US delta enjoyed good harvest weather over the weekend and more of the same is expected this week. The southwest winter wheat belt was mostly dry this weekend and a similar weather pattern is likely this week. The midwest was dry over the weekend. Up to .75' fell in parts of the western half of the belt overnight but dry weather is now forecast today through Saturday. The eastern half of the belt will see up to .75' scattered today and tomorrow with dry conditions Wed-Sat. The 6-10 calls for warmer and drier than normal weather. There is no freeze threat in the outlook for this week or next according to this morning's forecast.
The USDA quarterly stocks and final 2008 wheat production reports will be out tomorrow 7:30am US Central time. The weekly crop progress report this afternoon will probably show bean harvesting way behind its roughly 20% average pace for this time of year. Corn is likely to be way behind its roughly 20% average pace for this time of year also. FC Stone will put out their October crop production estimates Oct 1, followed by the USDA Oct 10.
This overall bearish weather picture and the bearish signals from the outside markets, responding to widespread financial turmoil, should keep grain prices under strong pressure all day today. ---Vic Lespinasse
Trepidation in Outside Markets May Affect Grains
A lower start is likely this am, around 10 in wheat, 5-7 corn and 1-3 beans. The outside markets are sending mixed signals to the grains this am with crude oil and the $ both lower while the Dalian, China grain futures market is mixed.
There is a good deal of trepidation in all the markets today with the $700 billion bail out deal stalled in Washington. Traders will be watching for developments in this situation today and depending on how things turn out, the equity and commodity markets, including grains, will respond. If no deal is reached, this would probably be bearish for most markets, including grains. If a deal is achieved, this might have a supportive influence on the grain market.
Much needed rain is forecast the next few days in Argentine wheat areas but amounts and coverage are uncertain. West Australia will continue to benefit from rain today with up to 1" falling there so far. However, dry weather will return after tomorrow while the rest of the Australian wheat belt remains dry for the next several days or longer. In general, more rain is needed in both Argentina and Australia soon to prevent a further decline in wheat production prospects.
Generally favorable harvest weather for corn and beans in the midwest is expected to continue the next several days. Light, scattered rain is forecast in the western half of the belt this weekend into Monday. Dry weather is forecast Tue-Wed. The eastern belt will be mostly dry the next 3 days with light, scattered rain forecast Monday-Tuesday. A frost is possible in the northern part of the belt Wed-Thur. Good bean harvesting weather is expected to persist in the delta the next week or longer. The southwest winter wheat belt will enjoy favorable planting weather the next week or so.
FC Stone will put out their October crop production estimates Oct 1. ---Vic Lespinasse
Trepidation in Outside Markets May Affect Grains
A lower start is likely this am, around 10 in wheat, 5-7 corn and 1-3 beans. The outside markets are sending mixed signals to the grains this am with crude oil and the $ both lower while the Dalian, China grain futures market is mixed.
There is a good deal of trepidation in all the markets today with the $700 billion bail out deal stalled in Washington. Traders will be watching for developments in this situation today and depending on how things turn out, the equity and commodity markets, including grains, will respond. If no deal is reached, this would probably be bearish for most markets, including grains. If a deal is achieved, this might have a supportive influence on the grain market.
Much needed rain is forecast the next few days in Argentine wheat areas but amounts and coverage are uncertain. West Australia will continue to benefit from rain today with up to 1" falling there so far. However, dry weather will return after tomorrow while the rest of the Australian wheat belt remains dry for the next several days or longer. In general, more rain is needed in both Argentina and Australia soon to prevent a further decline in wheat production prospects.
Generally favorable harvest weather for corn and beans in the midwest is expected to continue the next several days. Light, scattered rain is forecast in the western half of the belt this weekend into Monday. Dry weather is forecast Tue-Wed. The eastern belt will be mostly dry the next 3 days with light, scattered rain forecast Monday-Tuesday. A frost is possible in the northern part of the belt Wed-Thur. Good bean harvesting weather is expected to persist in the delta the next week or longer. The southwest winter wheat belt will enjoy favorable planting weather the next week or so.
FC Stone will put out their October crop production estimates Oct 1. ---Vic Lespinasse
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
