Lower to Much Lower Grains Start Expected
A lower to much lower start is expected this am, down roughly 5 in wheat, 5-7 in corn and 25-30 in beans. China's equity markets fell almost 7%, triggering economic worries around the world, which are reflected in lower crude oil prices and a higher $, bearish signals for the grains.
There were no corn, bean or meal deliveries this am, as expected. Wheat deliveries totaled 5600 and oil was 7600, both to Aug 28. ADM stopped 2700 of the oil for the only commercial feature. No new reports on the Argentine farmers strike this am, which is scheduled to end at the end of this week - if it isn't extended, which would be supportive for our bean market. The weekly crop progress report will be out this afternoon at 3 pm central time, showing how far behind corn and bean development remains.
Weekend rains eased drought conditions in northeast China, where 40% of China's corn and over 50% of China's beans are grown. Severe drought earlier in the season is still expected to cut production, however. The northeast region, which includes Jilin and Heilongjiang, the two largest corn/bean growing provinces, grows around 60 million tonnes of corn in most years but production this year could be cut as much as 30%, according to reports. Bean production could be trimmed around 20% vs last year. China has ample stocks to make up the shortfall but this will also likely cause China to keep importing large amounts of US beans for months to come. Chinese crushers currently enjoy good margins (the difference between the cost to buy and crush or process beans and the price the crushers can sell the beans for) so they have the incentive to continue importing beans. Hot temps and dry weather further stressed Argentine wheat over the weekend but cooler temps are predicted later this week, along with at least some much needed rain. Improved monsoon conditions were seen in India over the weekend in the form of better rain.
Here in the US Midwest, very cold temps for this time in the season were seen this weekend with lows in the 40's. Warmer temps are predicted later this week along with mostly dry weather. The threat of an early freeze will continue to provide underlying support for corn and beans for weeks to come, however.
There were no corn, bean or meal deliveries this am, as expected. Wheat deliveries totaled 5600 and oil was 7600, both to Aug 28. ADM stopped 2700 of the oil for the only commercial feature. No new reports on the Argentine farmers strike this am, which is scheduled to end at the end of this week - if it isn't extended, which would be supportive for our bean market. The weekly crop progress report will be out this afternoon at 3 pm central time, showing how far behind corn and bean development remains.
Weekend rains eased drought conditions in northeast China, where 40% of China's corn and over 50% of China's beans are grown. Severe drought earlier in the season is still expected to cut production, however. The northeast region, which includes Jilin and Heilongjiang, the two largest corn/bean growing provinces, grows around 60 million tonnes of corn in most years but production this year could be cut as much as 30%, according to reports. Bean production could be trimmed around 20% vs last year. China has ample stocks to make up the shortfall but this will also likely cause China to keep importing large amounts of US beans for months to come. Chinese crushers currently enjoy good margins (the difference between the cost to buy and crush or process beans and the price the crushers can sell the beans for) so they have the incentive to continue importing beans. Hot temps and dry weather further stressed Argentine wheat over the weekend but cooler temps are predicted later this week, along with at least some much needed rain. Improved monsoon conditions were seen in India over the weekend in the form of better rain.
Here in the US Midwest, very cold temps for this time in the season were seen this weekend with lows in the 40's. Warmer temps are predicted later this week along with mostly dry weather. The threat of an early freeze will continue to provide underlying support for corn and beans for weeks to come, however.
posted by InsightPublishing at
10:30 AM
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