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Mixed mostly lower grains start expected
A mixed, mostly lower start is expected this am, up 3-4 in wheat, down 1-2 in corn and off 3-5 in beans. There wasn't much news this am until a minute ago when the USDA announced China bought 348,000 tonnes of US beans for the 2009-10 crop year, which started Sep 1. The $ is a little higher but not enough currently to impact the grains very much. The grains have normal trading hours tomorrow, the last day of the year.
Tomorrow is first notice day for Jan deliveries. We expect roughly 200-400 beans, 0 meal and 2000-2500 oil.
Brazil was mostly dry yesterday. Scattered rain is forecast in Parana state today and tomorrow with light, scattered rain forecast in Parana and Rio Grande this weekend into early next week. Light, scattered rain is predicted in Mato Grasso state today through early next week. Argentina had light rain in Cordoba and Santa Fe provinces the last 24 hours. More of the same is forecast in southern and eastern grain areas the next two days. A better chance for rain is forecast early next week. Overall, conditions remain very favorable in Brazil and Argentina, both of which are currently predicted by the USDA to harvest large crops, especially in beans, where both countries could set production records this season.
Low trading volume can still move grain markets
A steady/lower start is expected this am, steady corn, 5 lower wheat and 5-8 down in beans. Following yesterday's big gains, we could see a "turn-a-round Tuesday" type trade today with prices reversing course from yesterday. The $ is sligthly lower this am but not enough currently to significantly influence the grains. Other commodity markets haven't changed much this am despite the slightly weaker $ with gold slightly lower while crude oil is slightly higher. There simply isn't much fresh news this am, at least not so far, so we could have a relatively quiet session. Of course, that doesn't mean the market won't move as light volume trading makes it easier to drive prices in either direction if funds, locals, commission houses or commercials become aggressive. Volume wasn't great yesterday but the market still made a sharp move higher.
Brazil had up to 1 1/2" of scattered rain in Parana state yesterday with mostly dry weather elsewhere. Rain will fall in Rio Grande state today, moving into Parana by Thursday before dry weather returns for the weekend. Mato Grasso state will see scattered rain today through Sunday. Argentina had up to 1.5" of scattered rain the last 24 hours. It will be generally dry the next several days although there will be some scattered, light rain at times. Overall, South American weather conditions remain very favorable.
The Midwest will be mostly dry today but light, scattered snow is forecast off and on tomorrow through the weekend, along with cold temps.
Snow storm further delays corn harvest
A much higher start is forecast this am, roughly 10 in wheat, 6-10 corn and 10-15 beans. The $ is moderately lower, providing support for all the grains. A big winter snow storm over the long holiday weekend dumped up to 2' of snow in the western Midwest, up to 1' in the northern half of the eastern Midwest, once again halting late corn harvesting. It is estimated roughly 500 million bushels of corn remains unharvested. Larger than normal harvest losses are expected as some of the unharvested corn will not be harvested until the spring, if at all.
China's Agriculture Ministry said China had a record grain harvest in 2009 of 530 million tonnes, surpassing the 2008 record of 528.5 million.
The Commitment of Traders report wasn't released Friday due to the Christmas holiday. It will be out this afternoon instead.
Brazil had up to 1.5" widespread rain over the last 3 days. More is forecast tomorrow through Friday. This rain will be welcome in the north but not in the south, where it remains too wet. Argentina welcomed up to 1 1/2" of scattered weekend rain. More scattered rain is forecast in northern and eastern areas today, followed by dry weather Tue-Wed before scattered rain returns Thur-Fri, keeping conditions favorable.
Following the big snow storm over the weekend, this week will be mostly dry in the western Midwest with light, scattered rain or snow in the eastern Midwest. Up to 1' of snow fell in parts of the southwest US winter wheat belt over the holiday weekend, providing protective snowcover from cold temps for the wheat crop. Light, scattered precipitation is forecast this week in the area.
Grains will close early; light volume likely ahead of holiday
A mixed start is forecast this am, roughly 3-4 lower wheat, 1-2 better corn and beans. The $ is a bit weaker, which should lend a little support to all the grains. If the $ continues to weaken, this would add additional support to the grains in what should be a very light volume trade ahead of the Christmas Day holiday tomorrow.
The grains close early today at noon US Central time and Jan options expire at this time also.
Weekly Export Sales were slow for wheat at just 221,000 tonnes, reflecting the fact US wheat prices still aren't competitive in the world market. Meal sales were in line at 254,000 tonnes, but the rest were all good - 1.592 million tonnes for corn, 1.195 million tonnes for beans and 47,000 tonnes for oil.
Widespread, welcome rain was seen in Argentine grain areas yesterday and overnight, up to 1.5" or more in some areas. More beneficial rain is forecast today in the north and east-central parts of the country. Scattered rain is then forecast every other day for the next several days, providing useful moisture for the crops. Brazil had up to 1" of scattered, unneeded rain in the southern grain areas the last 24 hours with more forecast today-Tuesday. The northern grain belt was mostly dry the last 24 hours and only light, isolated rain is forecast the next several days.
Scattered rain/snow was seen in the Midwest and southwest the last 24 hours. More is forecast today-Saturday in the western Midwest and southwest, through Sunday in the eastern Midwest.
$ slightly lower; better grains start expected
A mostly slightly better start this am is indicated by overnight trading. The $ is slightly lower and if it continues to weaken it will provide some support for the grains as well.
Corn harvest progress was in line with trade ideas, coming in at 95% complete yesterday afternoon. The Nov Census Bureau crush report was out this am. The crush was in line with trade ideas at 168.4 million bushels. Product stocks were very surprisingly higher than expected, however, 3.156 billion lbs for bean oil and 634,000 short tons for meal. The oil stocks were 300 million lbs higher than expected while meal stocks were 200,000 short tons higher than expected!
Two prominent senators said the Senate will take up the $1 a gallon tax subsidy given to producers of biodiesel fuel (methyl ester), chiefly made from bean oil, early next month. The subsidy will expire at the end of this month and many production facilities will temporarily shut down until the subsidy is restored. This is negative for bean oil as it will temporarily slow down demand but it was widely expected so it is already at least partly in the market.
The USDA this am announced the following sales: 78,000 tonnes of US beans sold to an unknown destination for the 09-10 crop year; 65,000 tonnes of US beans sold unknown for the 10-11 crop year; 114,000 tonnes of US beans sold to Italy for the 09-10 crop year; and 110,000 tonnes of US beans sold to China for the 10-11 crop year. The 09-10 crop year started Sep 1 and the 10-11 crop year starts Sep 1, 2010.
Jan options expire tomorrow at noon, US Central time, when the markets close early for the Christmas holiday.
South America remains a garden spot with very favorable conditions persisting in both Argentina and Brazil. Argentina had up to .7" of scattered rain the last 24 hours with more expected today. Additional welcome rain is forecast Sunday or Monday. Brazil saw scattered rain the last 24 hours in the south, dry weather in the north. More rain is forecast today-Monday in both the northern and southern growing areas.
Widespread, scattered rain or snow is forecast in the Midwest and the southwest US the next 2-3 days. Very slow late season corn harvesting is expected as a result in the Midwest.
Mixed grains start likely; little fresh news
A mixed start is likely this am, steady/lower wheat, steady corn and 2-4 better beans. As is typical for this time of year, there isn't much fresh market moving news so we could have another slow, dull session. Some traders expect a "turn-a-round Tuesday" type trade today with the market reversing course from yesterday's mostly lower close.
Weekly Export Inspections will be out at 10am, US Central time. Preliminary expectations are 13-17 million bushels in wheat, 28-32 million in corn and 45-50 million in beans. This afternoon, 3pm US Central time, the Weekly Corn Harvest Progress Report will be out with traders expecting around 94-96% of the crop harvested. Tomorrow am the Census Bureau will release the Nov monthly Crush Report. I should have trade estimates later today for this report.
Jan options expire Thursday at noon, US Central time when the grains close early for the Christmas holiday.
Algeria is in the market for optional origin wheat but they probably will not buy any US origin.
Argentina will see scattered rain today in the southwest part of the country with this rain spreading to the north and east tomorrow or Thursday. More beneficial rain is forecast Sat-Mon. Brazil will see widely scattered rain in the south the next few days and again early next week. The north will see scattered rain the next 3-5 days. Overall, conditions remain very favorable in most of Argentina and Brazil, increasing the prospects for very large crops this season.
More precipitation in the form of rain or snow is forecast in parts of the Midwest and southwest the next few days. This will continue delaying late corn harvesting in the Midwest while providing subsoil moisture for winter wheat in the southwest, which will be helpful in the spring when the crop comes out of its winter dormancy.
Overnight gains in grains but $ is weakening
A steady/better start is indicated by overnight trading but the $ is weakening and this could lend support to all the grains by the opening bell this am. The current call is 5 up in beans with wheat and corn steady/1 better.
There won't be any USDA reports today, such as the weekly export inspections at 10 am central time or the weekly corn harvest progress report at 3 pm central time since the USDA and many other US government agencies are closed today following the huge weekend winter snow storm. These reports will be out tomorrow.
On Thursday, the grain market will close at noon, ahead of the Christmas holiday Friday.
South American weather remains very favorable: widespread weekend rains of 1-4" were seen in Argentina with much of the country to see scattered rain again Wednesday or Thursday; Brazil saw scattered weekend rain in the south with more expected this week, which isn't wanted as conditions there remain too wet; Northern Brazil had up to 1.25" of scattered rain over the weekend, which was welcome, and more is possible today-Wednesday.
It was a generally dry Midwestern weekend. A big winter storm starting tomorrow night in the west, Wednesday in the east will bring up to 2" of rain (7-15" of snow) to the western half of the belt with up to 1.5" of rain (up to 1' of snow) to the eastern part of the belt. This will stop late corn harvesting efforts once again. It is estimated roughly 95% of the crop has been harvested, leaving roughly 650 million bushels of corn in the fields.
Overnight gains; $ not providing direction
A slightly higher start is indicated this am by overnight gains, roughly 2-4 wheat and corn, 4-5 beans. The $, the main driver of yesterday's sharply lower market, is just slightly higher currently this am, not providing any strong direction for the grains. Traders will continue watching the $ for guidance throughout the session. Depending on what the $ is doing around the grains opening it might provide strong direction at that time.
Informa will estimate the size of the 2009 US harvest and acreage for 2010 at 10:30 this am. These numbers shouldn't have a major impact on prices but they could have some influence so I will relay them to you as soon as I see them.
The USDA attache in Beijiang cut his Chinese wheat crop guess for 09-10 to 106 million tonnes and his corn guess to 150 million. Attache estimates aren't official USDA estimates. The latest official USDA numbers are 114.5 million tonnes for wheat and 155 million for corn. The next USDA Chinese crop estimate will be Jan 12. The USDA just announced the sale of 116,000 tonnes of US beans to China but for the 2010-11 crop year, not this crop year (2009-10). The 2010-11 crop year starts Sep 1, 2010.
Brazil was mostly dry yesterday in the south and more dry weather is forecast today-Saturday. Light rain is forecast Sun-Wed in Rio Grande state but Parana state is expected to stay dry. Northern Brazil will see scattered rain today-Monday. The dry period in the south will be welcome, as will the wet weather in the north. Argentina saw up to 1" scattered rain overnight in Buenos Aires province. Dry weather was the rule elsewhere. U p to 1.5" widespread rain is expected today-Sunday. More beneficial rain is possible Tue or Wed.
The Midwest was generally dry the last 24 hours. Light, scattered snow is forecast the next few days. Heavier precipitation in the form of rain or snow is predicted Tue-Wed in the west, Wed-Thur in the east. This could again delay the end of corn harvesting in parts of the Midwest.
$ at three month high
A lower start indicated in all pits, roughly 10 wheat, 5 corn and 5-10 beans. The $ is very strong this am, weighing heavily on various commodities such as gold and, to a lesser extent, crude oil. The $ is now at a three-month high, a bearish signal for all commodities.
Weekly export sales were in line for wheat at 345,000 tonnes and meal at 191,000 tonnes. The rest were good: 1.227 million tonnes of corn, 935,000 tonnes of beans and 21,000 tonnes of oil. China accounted for 668,000 tonnes of the bean sales.
Yesterday, Argentina's Agricultural Ministry lowered their estimated bean planting area from 18.5 million hectares to 18.2 million. (1 hectare = 2.471 acres) They increased their estimated corn planting area to 3.16 million hectares from 3.06 million previously. Chinese traders think the Chinese government will soon release up to 500,000 tonnes of bean oil and 300,000 tonnes of rapeseed oil into the Chinese market to stabilize prices and ensure adequate supplies. This was talked about a week ago and at that time it weighed on our bean oil market. However, this talk didn't generate any pressure today in the Malaysian palm oil market, which ended 34 ringgit higher at a 6 1/2 month high so it probably won't have much impact on our bean oil market today, especially since the Chinese government is expected to replenish any oil stocks they sell with fresh stocks.
Argentina saw light rain the last 24 hours in the big grain growing provinces of Santa Fe and Cordoba. More widespread rain is forecast Fri-Sun, up to 1.5", which will be very beneficial for the crops. Brazil will be mostly dry in the south the next several days before rain might return early next week, which isn't needed. The north had up to 1.25" the last 24 hours with more possible Fri-Sun.
The midwest was mostly dry the last 24 hours. Light snow is possible the next several days. The 6-10 day calls for below normal moisture in the north, above normal in the south.
Markets tentative ahead of Fed announcement
Prices will be slightly higher to start this am, about 1-2 wheat, 2 corn and 3-5 beans. The $ is a little lower currently, providing modest support for grain prices. There could be a little tentativeness in all commodities markets today ahead of the US Federal Reserve Board's policy and interest rate anouncement at 1:15 pm central time. No rate change is expected but depending on what the Fed statement says (and how it says it) the $ could be impacted, which would influence all commodities, including grains.
Egypt is in the market for optional origin wheat with a decision expected shortly before our market opens at 9:30 am central time.
Southern Brazil will see light, scattered rain in some parts of the region the next few days, which isn't welcome. The north benefited from up to 3/4" the last 24 hours with more expected the next 3 days. Argentina enjoyed scattered rain the last 24 hours, up to 3/4". More scattered rain is expected today-Sunday with around 65% coverage of up to 1", all of which will be welcome.
The midwest was mostly dry the last 24 hours. The west will stay mostly dry today into early next week. The east will be dry the next few days but light snow is possible Sat-Mon.
There's reason to sell grains if sellers show up
A lower start is forecast this am, roughly 5 in wheat, 3-4 in corn and beans. There are reasons to sell the grains this am but the question is - will the sellers show up? If not, prices will soon rally again, as was the case yesterday right after the opening, when selling quickly dried up, replaced by increasingly aggressive buying, especially in beans. This caused the sharp rally in beans with the rest of the floor following suit. It's Tuesday and the market often reverses course on Tuesday, especially after a big move on Monday, the "turn-a-round Tuesday" syndrome. The $ is fairly strong this am, a bearish influence for all the grains. South American weather remains very favorable overall. There is no fresh bullish news of any consequence so far this am. Many traders think yesterday's gains were overdone, especially in beans, making these traders more inclined to trade from the short side today. All these reasons are likely to pressure prices initially but, again, will the sellers actually show up, especially after the probable lower start?
Corn harvest progress was 92%, as expected. Starting tomorrow, March will replace Jan as the top month in beans so trade March as of tomorrow if you want to be in the most active, liquid month in beans.
Argentina was dry the last 24 hours. Light, scattered rain is forecast today and Thursday. Up to 1" of welcome rain is forecast Friday or Saturday. Brazil will see light, scattered rain off and on the rest of the week in the south, where it isn't wanted as it will cause further planting delays. The north had up to 1" of rain over the last 24 hours and more is forecast today-tomorrow, which is welcome.
The midwest was generally dry the last 24 hours. More of the same is forecast for the west the rest of the week. The east will be dry the next 3 days but light snow is forecast in the south Fri-Sun. The southwest winter wheat belt will stay mostly dry the rest of the week.
Lower grains start forecast
A slightly lower start is forecast this am, down roughly 2-4 wheat, corn and beans. The $ is a shade lower at this time, not enough to influence the grains very much.
Dec futures contracts expire at noon US central time, today.
The National Oilseed Processors Association Nov crush was much higher than expected at 160.3 million bushels. Oil stocks were 2.411 billion lbs, not as high as might have been expected given the much larger than expected crush. Corn harvest progress this afternoon is likely to be around 91-94% done, meaning as much as 1 billion bushels of corn could still be unharvested and in danger of a quality downgrade or being lost altogether. It is widely thought corn acreage needs to increase roughly 2 million acres next year over this year's 86.4 million acres due to increased ethanol production and demand. That thinking helped push corn prices higher last week as higher prices will lead to increased acreage.
A Chinese government official said China could release bean or rapeseed oil stocks to ensure supplies and stabilize prices. This weighed on bean oil and bean prices in the Dalian, China futures market today.
Argentina had light, scattered rain overnight. Thur-Sat up to 1" is forecast scattered over the main growing provinces of Santa Fe, Cordoba and Buenos Aires. This should help keep conditions in good shape overall. Up to 1.5" of scattered rain fell in the main growing areas of Brazil over the weekend. More is forecast this week. This rain won't be welcome in southern Brazil, which remains too wet but it will be welcome in the north, helping keep conditions good overall.
Up to 1" of moisture fell in the eastern midwest over the weekend but the western half of the belt was generally dry. Only light, scattered precipitation is forecast this week, which could help late corn harvesting.
Winter storm will halt corn harvest in Midwest
A mixed/mostly higher start is expected this am, steady/mixed in wheat, 1-3 higher corn and 5-7 up in beans. The $ is higher, a negative indicator for all the grains but lately some of the grains, especially beans, have repeatedly demonstrated an ability to ignore the $'s dictate and trade independently. Many traders think this could be the case again today as beans were higher overnight despite modest gains in the $.
As was the case yesterday, Dalian, China bean futures were higher today, making new highs for the year for the second day in a row. This is the main reason our bean prices gained yesterday and again overnight. More of the same is likely this am.
Yesterday afternoon the weekly crop progress report showed 88% of the corn crop had been harvested, roughly as expected. Bean harvesting and winter wheat planting were not reported as they are all done.
Deliveries this am totaled 1500 wheat, 1300 corn and 600 oil.
ABARE, the Australian equivilent of the USDA, cut its Australian wheat production guess to 22 million tonnes from 22.7 million previously due to poor weather. Conab, the Brazilian version of the USDA, raised their bean production guess to a record 64.56 million tonnes vs their Nov guess of 63.05 million. They cut their corn crop guess to 50.15 million from 51.55 million in Nov but hiked their wheat guess to 5.1 million tonnes vs 5.04 million last month.
A widespread winter storm will sweep across much of the midwest today and tomorrow, especially the western and northeastern parts of the belt. Up to 1' of snow is likely from this storm, along with high winds, bringing corn harvesting to a halt with almost 1.5 billion bushels of corn still left to harvest. Dry weather is forecast to return to the belt Thur-Fri. The southwest winter wheat belt will also have a winter storm today but snow is welcome there to shield the young wheat crop from cold temps and prevent winter kill. Winter kill occurs when immature wheat is subject to freezing temps. Snowcover provides an insulating blanket that protects the crop against freezing temps.
Scattered, light rain is forecast today-tomorrow in parts of Argentina after a dry last 24 hours. More scattered rain is forecast this weekend. The new 6-10 day forecast calls for wetter weather in Argentina, which will be very welcome. Brazil remains wet with more rain forecast the rest of the week. Too much rain has slowed bean planting in the south but overall conditions remain very good in Brazil.
Major storm will halt corn, bean harvesting
A mixed start is indicated this am, roughly 3-5 lower wheat and corn, 5 higher beans. The $ is a shade lower this am and won't influence the grains unless it moves further in either direction.
Deliveries totaled 1800 wheat, 1400 corn, 380 oil and 273 oats. The feature was JP Morgan putting out (delivering) 600 corn, most likely for Cargill.
Dalian, China grain futures were higher today with beans making a new high for the year. This lent support to our bean market in overnight trading.
The Goldman Sachs "roll" starts today and continues for 5 days. They will move their index fund long positions forward in the bean complex by buying Mar/selling Jan in beans, oil and meal, mostly late in the day, around the close. This could weigh on the Jan in these pits late each day.
The USDA US supply/demand and world production, supply/demand reports wll be out Thursday am. Usually, this isn't a major report but that doesn't mean it won't move the market Thursday. Expect some evening up Wednesday ahead of this report. The bean/corn ratio is at its highest level since late August in Mar beans/corn as beans continue to gain relative to corn on a spread basis.
Argentina saw up to .7" of rain this weekend scattered in southern and western areas, where it is welcome. Mostly dry weather is forecast this week, however, but more rain would be welcome in all areas. Up to 1.5" of unwelcome rain fell in parts of southern Brazil over the weekend, slowing bean planting. Light, scattered rain is forecast the rest of the week in the south. The northern areas had up to 2" of weekend rain with more forecast the next few days.
It was generally dry in the Midwest over the weekend. A winter storm will bring up to 12" of snow, the equivalent of up to 1" of rain, to the western half of the belt Tue-Wed with dry weather forecast the second half of the week. The east had snow overnight with more forecast today-Wed, up to 12" or 1" of rain, before dry weather arrives the second half of the week. High winds across much of the midwest will accompany the storm. This will halt corn and late bean harvesting and could cause some crop losses in unharvested fields. Protective snowcover is forecast in parts of the southwest winter wheat belt this week, where it will be welcome.
Rally in the $ may weigh on grains
A mostly lower start is indicated this am despite overnight gains in beans. The monthly employment report this am sparked a big rally in the $, which is likely to weigh on all the grains this am, including beans. Other commodity markets are generally lower, especially gold, which currently is down over $30 an once. The early call in grains is 1-2 lower wheat, corn and beans. There is little in the way of any other fresh news so far this am so the market will likely take most of its direction from the $.
Deliveries were 2200 wheat to Dec 3, 837 corn to Nov 27, 682 oil to Dec 3 and 182 oats to Dec 3.
The USDA just announced the sale of 232,000 tonnes of US beans to China for the 2009-10 crop year, which started Sep 1.
Brazil will see welcome dry weather in the southern part of the country the next several days with rain returning to this area Tue-Wed. The northern areas will continue to have rain the next several days. Argentina was generally dry yesterday and will stay that way today. Up to 1/2" of welcome rain is forecast over the weekend but this will be widely scattered. Better rains are predicted early next week except in southern Buenos Aires province, which will stay dry. More rain would be welcome everywhere in Argentina.
The midwest will be generally dry the next several days. Precipitation in the form of rain or snow is likely Tue-Wed next week, along with high winds. Farmers will try to harvest as much of their remaining corn and beans ahead of this storm, which will halt harvest efforts once it hits. The high winds are especially dangerous for corn since if the corn stalks are knocked down by the wind or snow they can't be harvested anymore. An additional problem this season for farmers is the high moisture content of the corn, which is dangerous to store due to the high risk of mold developing and is very expensive to dry down to a normal moisture content. Thus, some corn farmers are caught between the proverbial "rock and a hard place" as far as harvesting their corn crop is concerned.
Higher grains start expected; $ slightly lower
A higher start is expected this am, roughly 3-5 wheat, 2-3 corn and 5-10 beans. The $ is only slightly lower, not enough currently to impact the grains very much.
Deliveries totaled 3300 wheat, 800 corn, 668 oil and 300 oats. ADM put out (delivered) 550 corn. JP Morgan didn't take delivery of any corn this am, meaning Cargill didn't take delivery, at least not through JP Morgan. Egypt is in the market this am for optional origin wheat but it is doubtful they will buy any US wheat.
The Canadian railroad strike appears to be over this am before it had a chance to influence our market.
The monthly oil stocks report this am showed 212 million lbs of US bean oil was used to make bio diesel fuel (methyl ester) in Oct vs 206 million in Sep and 263 million in Oct 2008.
Stats Canada estimated all wheat production at 26.5 million tonnes, durum at 5.4 million tonnes, oats at 2.8 million, canola at 11.8 million and barley at 9.5 million. The all wheat and canola numbers were bearish, each about 1 million tonnes higher than expected. The oats estimate was a little friendly, about 300,000 tonnes less than expected.
Weekly export sales this am were in line for wheat at 391,000 tonnes, corn at 659,000 tonnes, and oil at 19,000 tonnes. Beans were poor at only 722,000 tonnes, as was meal at 107,000 tonnes. Reports of poor quality corn due to high moisture content, with the increased risk of spoilage, continue to force farmers to sell more corn and store less than they usually would. This increased farmer selling has weighed on the cash corn market, causing basis levels to break harder than usual for this time of year. (Basis is the difference between the cash price and the futures price.) For example, Iowa basis bids are roughly 50 cents below the Dec futures price vs the usual 25 cents for this time of year.
Up to 1.5" of unwanted rain fell in southern Brazil yesterday but mostly dry weather, which is welcome, is forecast the rest of the week. Argentine grain areas will stay mostly dry the rest of the week but some light, scattered rain is forecast Mon-Tue, which will be very welcome.
The Midwest saw some harvest delaying moisture in the east the last 24 hours but the west continues dry. The forecast calls for generally dry midwestern weather the rest of the week with only light, scattered precipitation early next week. This should allow for continued rapid harvest progress.
Lower $ shouldn't impact grains
A slightly lower start is expected this am, 1 in wheat, 1-2 in corn and 4-5 in beans. The $ is slightly higher but probably not enough to influence grains significantly. Yesterday the $ was very weak but the grains still sold off and ended lower. The grains have divorced themselves repeatedly from the $'s influence lately so a slightly lower $ this am shouldn't impact the grains much either way.
Farmers took advantage of recent big gains in corn and beans yesterday by selling increased amounts of cash grain. This, coupled with the relative lack of large scale, aggressive fund buying caused prices to give up early gains and sell off sharply from the early highs by the close. Some followthrough selling could be seen this am due to the lack of any other significant market moving news.
Deliveries totaled 4600 wheat to Dec 1, 481 corn to Oct 22, 775 oil to Nov 30 and 296 oats to Nov 20. JP Morgan, probably acting for Cargill, put out 412 of the 1028 corn they took delivery of yesterday.
Stats Canada will put out their Dec production estimates tomorrow am. Traders look for all wheat production of 25.6 million tonnes vs 24.6 million on Oct 2; durum wheat 5.3 million vs 5.1; oats 3.1 million vs 2.9; canola 10.8 million vs 10.3 and barley 9.3 million vs 9.2.
Argentina was generally dry yesterday with light, widely scattered showers possible today and again Saturday. More rain would be welcome in all the main Argentine growing areas but only light, scattered rain is likely over the next week or so. Brazil remains in good shape with the exception of Rio Grande state in the south, where too much rain has fallen. Up to 1" of unwanted rain is forecast in Rio Grande today, after which dry weather is forecast (and welcome) for several days.
The midwest was dry the last 24 hours. The west will stay dry today into early next week. The east will see up to .5" of moisture today-tomorrow before dry weather returns Friday into early next week. The 6-10 day predicts below normal precipitation in the northwest, above normal in the southeast. Generally favorable conditions continue in the southwest winter wheat belt.
Bulls hope for new fund money with new month
A steady/higher start is likely this am, roughly 10 up in beans but only steady/better in wheat and corn. It's a new month and the bulls fervently hope this brings new fund money into the market, as was the case the first two days of Nov, with much higher prices as a result. The $ is playing its part this am, trading lower and helping various commodities rally, from crude oil to gold.
Dreyfus stopped 1028 wheat on delivery yesterday and put it all back out on delivery this am. ADM put out 1100 corn. There were 4500 wheat, 1103 corn and 634 oil on delivery today. The delivery date was Dec 2 for all.
Corn harvest progress was reported yesterday afternoon at 79% vs 97% average. Beans were 96% vs 98% average. Winter wheat planting reached 96% vs 98% average with emergence 89% vs 93% average.
The Commodity Futures Trading Commission, as expected, approved variable storage rates for wheat starting with the July 2010 contract. This is being done in an attempt to improve convergence, or the coming together of the cash and futures prices when a contract is in the delivery period and about to expire, something that hasn't been happening in wheat the last couple of years. Some think this is due to huge fund buying of wheat futures, keeping prices artifically high relative to the wheat cash market. Hopefully, variable storage rates will help resolve this problem, although many traders are skeptical. Currently, for example, the cash market in Toledo, a major wheat storage and delivery point, is roughly 65-70 cents below the Chicago Dec wheat futures price, illustrating the lack of convergence in this market, although this is better than a year ago, when cash values in Toledo were about $2 below Chicago.
Canadian National Railroad engineers are on strike and IF this strike were to continue longer than a few days, it could inhibit Canadian grain export shipments, which would be friendly for US grain export prospects. However, the Canadian government isn't likely to allow this strike to go on long enough to seriously damage Canadian grain export shipments.
The USDA just announced the sale of 116,000 tonnes of US corn to an unknown destination for the 2010-11 crop year, which starts next Sep 1.
Scattered rain is forecast in Brazil this week with too much rain still a problem in the southern state of Rio Grande. Argentine grain areas will see only light, scattered rain today-Thur and again early this weekend, favoring the southwest part of the country. This light moisture will still be welcome but more will still be needed again soon.
The US Midwest has been dry the last 24 hours and more of the same is forecast the rest of this week in the west. The east will see mostly dry weather the rest of the week also with the exception of tomorrow, when up to 3/4" of moisture is forecast. This forecast should allow for further rapid corn harvest progress.
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