Oct 9 Afternoon Ag Commentary

by Steve Freed,

Soybeans, soymeal and wheat traded higher. Soyoil and corn traded lower. US stocks, hogs and soybean traded higher on hopes of a partial trade deal with US and China.

SOYBEANS

Soybean traded higher. Potential trade deal with US and China, Wet and cold US weather and the potential for a friendly USDA October crop and supply and demand report tomorrow offered support. Concern that US may not agree to a partial deal may be offering resistance to prices. The average trade estimate for US 2019 soybean crop is 3,563 mil bu vs USDA Sep number of 3,633. One private guess is 3,470. The average trade estimate for US 2019/20 soybean carryout is 496 mil bu vs USDA Sep number of 640. Chinese officials have discussed offering to buy total U.S. soybean volumes that could exceed 30m tons in the marketing year started Oct. 1 depending on how the trade talks progress, according to people familiar with the situation. China may also offer to buy 300k-400k tons of pork, and 3m-4m tons of wheat, one of the people said. China imported 8.6m tons of soybeans in the first 11 months of the last marketing year, which ended on Sept. 30.

CORN

Corn futures traded lower. May have been some long liquidation after the recent rally and going into tomorrow USDA report and weekly US export sales. US export sales pace continues slow. Some feel USDA could drop their forecast of 2019/20 US corn exports 200 mil bu from their current est of 2,050 mil bu. This could offset the talk of a lower US 2019 crop and the unexpected USDA lower estimate of US 2018/19 end stocks. The average trade estimate for US 2019 corn crop is 13,588 mil bu vs USDA Sep number of 13,799. One private guess is 13,040. The average trade estimate for US 2019/20 corn carryout is 1,682 mil bu vs USDA Sep number of 2,190. Weekly US ethanol production was up from last week but down from last year. Stocks were down from last week and last year. Margins improved. US north plains could see the first winter storm of the year over the next few days. E ND could be hit the hardest with up to 15 inches of snow and blowing winds forecasted. This is less than feared yesterday. The US Midwest and plains 6-10 day forecast calls for above normal rainfall and normal to below temps. This could slow the harvest and reduce the NW Midwest crop size.

                              

WHEAT

Chicago wheat futures have staged a mini rally from a recent low near 4.50 to 5.00. This due to a lower US 2019 SRW crop and concern over the final US all wheat crop due to a late finish to the spring wheat harvest. KC December wheat continues to trade in a tight range between 4.00 and 4.20. Low protein crop and slow export demand continues to offer resistance to prices. Minneapolis wheat saw some profit taking from recent high but is now turning back higher on concern about the quality of the US and especially Canada 2019 spring wheat crop. Trade is still looking for USDA to estimate US 2019/20 wheat carryout near 1,014 mil bu and World stocks near 285.2 mmt on tomorrows key USDA report. This still offers resistance to HRW prices. Potential rally in December corn over 4.00 due to lower US supplies could help Chicago December wheat test 5.20.

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2019-10-09T19:28:18+00:00 October 9th, 2019|