Higher start expected
A higher start is expected, led by Sep beans and meal. The early call is 2-4 up in wheat and corn, 12-15 higher in beans with Sep beans 20 or more higher while Sep meal opens roughly $10-15 stronger. Crude oil and equities are a little higher but the $ is mostly steady this am, not providing much guidance for the grains. Tight supplies, which are expected to get even tighter ahead of the new crop bean harvest, coupled with strong ongoing demand are behind the upward explosion in Sep beans and meal.
The USDA announced this am the sale of 110,000 tonnes of US beans to China, the latest in a long list of bean sales to China at a time in the season when South America usually dominates the bean export business. Argentine farmers started their 7 day strike today, increasing uncertainty about their reliability in the eyes of foreign buyers such as China. Due to the severe drought that hit Argentina this season, they don't have much of a crop to export even without a strike. Brazilian bean supplies are very tight with only roughly 6 million tonnes of stocks available until the new crop harvest, which is still at least 5 months away. This leaves the US as the only big source of beans for the next several months. China has already bought almost 8.4 million tonnes of US beans so far this season, twice the amount they had bought at this time last year! Taiwan also bought US beans today, taking 60,000 tonnes.
The cash bean market here in the US remains very strong as exporters vie with crushers for dwindling supplies, driving up prices in the process in both the cash and Sep futures markets. Monday is first notice day and no deliveries are expected in either beans or meal. Big deliveries are forecast in oil, roughly 3-4,000 lots.
The CFTC said they will not release their newly formatted Commitment of Traders report this afternoon. They will issue the old formatted report today with the new format delayed until sometime in the future. The CFTC didn't say when the new version of this report will be released but this did say they will announce it ahead of time.
The market is caught between two extremes currently: if an early freeze hits the crops, as many traders fear could be the case following this very cool summer, prices will shoot sharply higher. On the other hand, if we do not have an early freeze, especially if we have an extended growing season, we will have a record large bean crop and the second largest corn crop ever, which could drive prices much lower. Many traders simply don't know what to do in this situation and they are being extra cautious.
Drought has hurt Chinese corn and bean production prospects this season but there is beneficial rain in the picture in the main growing areas the next several days. India's monsoon rains are forecast to continue improving the next several days as well, which will be very welcome.
The US Midwest will be very much cooler than normal this weekend well into next week, further slowing development of the corn and bean crops and making them more vulnerable to an early freeze. There has been plenty of rain across the Midwest this week and more is forecast in the east today.
The USDA announced this am the sale of 110,000 tonnes of US beans to China, the latest in a long list of bean sales to China at a time in the season when South America usually dominates the bean export business. Argentine farmers started their 7 day strike today, increasing uncertainty about their reliability in the eyes of foreign buyers such as China. Due to the severe drought that hit Argentina this season, they don't have much of a crop to export even without a strike. Brazilian bean supplies are very tight with only roughly 6 million tonnes of stocks available until the new crop harvest, which is still at least 5 months away. This leaves the US as the only big source of beans for the next several months. China has already bought almost 8.4 million tonnes of US beans so far this season, twice the amount they had bought at this time last year! Taiwan also bought US beans today, taking 60,000 tonnes.
The cash bean market here in the US remains very strong as exporters vie with crushers for dwindling supplies, driving up prices in the process in both the cash and Sep futures markets. Monday is first notice day and no deliveries are expected in either beans or meal. Big deliveries are forecast in oil, roughly 3-4,000 lots.
The CFTC said they will not release their newly formatted Commitment of Traders report this afternoon. They will issue the old formatted report today with the new format delayed until sometime in the future. The CFTC didn't say when the new version of this report will be released but this did say they will announce it ahead of time.
The market is caught between two extremes currently: if an early freeze hits the crops, as many traders fear could be the case following this very cool summer, prices will shoot sharply higher. On the other hand, if we do not have an early freeze, especially if we have an extended growing season, we will have a record large bean crop and the second largest corn crop ever, which could drive prices much lower. Many traders simply don't know what to do in this situation and they are being extra cautious.
Drought has hurt Chinese corn and bean production prospects this season but there is beneficial rain in the picture in the main growing areas the next several days. India's monsoon rains are forecast to continue improving the next several days as well, which will be very welcome.
The US Midwest will be very much cooler than normal this weekend well into next week, further slowing development of the corn and bean crops and making them more vulnerable to an early freeze. There has been plenty of rain across the Midwest this week and more is forecast in the east today.
posted by InsightPublishing at
10:30 AM
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