** It has been a strong CBOT start of the week with an open chart gap of just .25 of a cent in November soybeans spurring on additional buying this AM. Funds have been active buyers of November soybeans and December corn as they cover net short positions. Wheat has come along for the ride. The CRB index has rallied sharply with crude oil up $1.50/barrel amid strong world demand amid the uncertainty of Hurricane Irma, which reached category 5 status this AM, with recorded winds being the 6th strongest on record. A strong close is expected today, but some profit taking heading into the close is expected based on the soon to start S Midwest harvest.
** FAS reported daily sales of 136,000 MTs of US soybeans to China and 143,650 MTs of corn to Mexico. China remains active in asking for mid October and beyond offers.
** US weekly export inspections for the week ending October 31st were; 31.4 Mil Bu of corn, 23.7 Mil Bu of soybeans, and just 9.3 Mil Bu of wheat. The weekly wheat export pace was disappointing. For their respective crop years to date, the US has exported 2,240 Mil Bu of corn. Assuming Census data, this implies that the US exported 1,087 Mil Bu of corn during the 2016/17 crop year.
** This would be 60 Mil Bu above the latest WASDE forecast and reduce 2016/17 US corn end stocks closer to 2,700 Mil Bu. Assuming the same August yield, new crop US corn end stocks would be reduced closer to 2,200 Mil Bu.
US 2016/17 FGIS soybean exports were 2,120 Mil Bu or 228 Mil Bu above last year or 12%. ARC sees no reason for WASDE to raise or lower their export forecast of 2,150 Mil Bu. US wheat exports to date stand at 282.7 Mil Bu or 16 Mil Bu above last year.
** The USDA September Crop Report will be released in 1 week from today. The trade is generally looking for increased yield/production based on GD/EX condition ratings rising from August 1st to late August. However, producers would argue that the great variability of the crop leaves some doubt on this analysis with USDA field surveys to gain in crop size importance.
** Russia has now harvested 67.8 MMTs of wheat and 17.5 MMTs of barley. The yield to date is record large at 3.84 MTs/HA (57 BPA vs last year’s record 47.1 BPA). The Russian wheat yield seems impossible, being well above the US. However, Russia has had extremely favorable weather and really advanced their agronomics of wheat farming. Russia’s massive wheat crop will have an export tail well into early 2019.
** CBOT brokers estimate that funds have bought 6,000 contracts of corn, 9,000 contracts of soybeans, and 3,200 contracts of Chi wheat. In soybean products, funds have bought 5,500 contracts of soymeal and 2,700 contracts of soyoil.
** Midday GFS Weather Model Update: The forecast is little changed at midday. Dry weather prevails across all of the Plains, Delta and the Midwest for the next 10-14 days.Temps start out cool with lows ranging from the mid 30’s to the lower 40’s, and then warming thereafter. There is no evidence of any Midwest frost/freeze damage. The forecast takes Hurricane Irma into S FL and then moves it directly north across the entire state. Our confidence is rising that Irma will make a direct hit on FL. However,there is still a 20% chance that Irma could track into the Gulf and reach as far west as New Orleans. Irma is a very dangerous storm with winds at an Atlantic record 180 MPH. Landfall is expected late in the weekend.
** AgResource Market Comment: It’s a macro day with the CRB index rallying sharply with gains noted across the commodity spectrum. Look for some MOC buying from macro funds near the close. Hurricane Irma is a dangerous storm and its likely to make landfall in FL. The storm’s shear strength of the storm is causing some issues for the forecast models. ARC would not chase this rally with the September Crop Report due Tuesday and the harvest following.
** GFS Midday 10 Day Rainfall Forecast: