** Black Box selling has been the theme at the CBOT with corn, soybeans and wheat sagging under chart based selling. End user scale down buying is noted, but few traders desire to take large positions ahead of the September 29th NASS Stocks and Final Small Grains Report. December corn is back testing recent lows against $3.45 with wheat sagging on ample world supplies, while November soybeans tested $9.5975, the 100 day moving average, while December Chi wheat fell to $4.36 – a 61.8% correction of the most recent advance.
The market continues to listen to harvest results which are mixed in corn, with a downward trend in soybeans. Many producers report that their early corn harvest results are better than expected, but below last year. The comparison on yield should be 2016 – not what farmers had expected on yield trends!
** Soyoil/soymeal spreading is back in vogue this AM as US cash soyoil supplies are tighten (even as crush rates expand) due to strong biodiesel interest. The cash soyoil market is unlikely to have a significant decline amid strong biodiesel demand. US tariffs on imported Argentine/Indonesian biodiesel is bullish on domestic US vegoil prices, but bearish on world fob values. The US soyoil market will become an “island unto itself” in early 2018 as supplies tighten to levels not witnessed in years.
** Egypt’s GASC secured 175,000 MTs of Russian wheat with FOB values ranging from $195-198/MT and CIF values of $210.50-213.25. GASC paid a higher price than their last tender in confirmation of world wheat price trends. No Eastern European wheat was offered due to the ongoing poppy seed dispute. ARC looks for GASC to continue seeking/securing Russian wheat in future wheat tenders.
** Stats Canada offered a updated satellite survey estimating their ‘17 all wheat crop at 27.13 MMTs, oats output at 3.80 MMTs, and canola output at 19.60 MMTs. ARC notes that the track record of Stats Canada satellite surveys is not very good with a 70% reliability to actual surveys. Normally, the Stats Canada satellite survey overstates crop sizes based on prior year greenness data.
** Russia has now exported over 11 MMTs of grain through mid September which is up 22% from last year. Russia has made strong efforts to export as much grain as possible to rid itself of huge stocks in the interior. It’s unlikely that Russia can continue this robust export pace as weather has been optimal.
The dryness that has allowed nonstop Russian and Ukraine grain loadings is starting to worry producers as they plant their new winter grain crops in the dust. The forecast maintains a mostly dry weather pattern for the next 10 days for Ukraine/E Russia. This is not the weather pattern of recent years that allowed for strong development of the new winter crops.
** CBOT brokers report that funds have sold 6,000 contracts of soybeans, 7,000 contracts of corn, and 3,200 contracts of wheat.
** Midday GFS Weather Model Forecast Update: The forecast is little changed from the overnight run with moderate to heavy rainfall slated to drop across the NW Midwest and the W Plains from a stuck Ridge/Trough pattern. .5-3.50” of rain looks to fall across; MN, NE, KS and portions of IA over the next 10 days. The very dry E Midwest will continue to see limited rainfall with a more active harvest expected to develop next week. There is not much indication of rains for the E Midwest into Oct 1st. Temps average above to much above normal with highs in the 80’s to mid 90’s with the warmth to persist across the E Midwest next week. Jose and Maria are not expected to make a US landfall. However, the storms slow any eastward weather pattern movement into October.
** AgResource Market Comment: The CBOT is lower on chart based selling and the expected quickening of the Midwest harvest. Farmers tell ARC that they will store as much of their crops as possible with any sales occuring in the last 20% of the harvest. Early producer yield reports on corn are all over the board, but the soy yield trend is disappointing compared to last year and NASS expectations. ARC favors beans vs corn – with wheat a follower.