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Morning #Grain Comments, #Corn, #Soybeans, #Wheat

-EU wheat crop/export ideas raised again
-Cattle on Feed report tomorrow – 1st year-over-year decline expected in 2 1/2 years
-No cold air threats through 16-day period
-Brazilian corn crop seen modestly increasing this year
-Soybean/corn export sales strong – wheat weak

* Strategie Grains further raised their estimate of this year’s EU soft wheat crop to 144.5 MMT from 142.9 MMT last month, further increasing the sharp rebound from last year’s 127.1 MMT crop and not moderately surpassing 2017/18’s 142.1 MMT. With the increase in the crop estimate, they also raised their estimate of EU soft wheat exports to 25.7 MMT from 24.8 MMT previously and is up sharply from last year’s 21.0 MMT. They modestly raised their estimate of the EU corn crop to 63.8 MMT from 63.2 MMT last month and compares to 61.7 MMT last year. The barley crop estimate was ticked higher to 61.0 MMT from 60.5 MMT last month and compares to 55.7 MMT last year.  A wire service poll of Brazilian ag industry consultants/participants revealed average expectations for the coming year’s Brazilian corn crop at 102.3 MMT, up from this year’s crop currently estimated by CONAB at 100.0 MMT and by USDA at 101.0 MMT. USDA is currently penciling the coming crop unchanged at 101.0 MMT. Total corn area this year is expected to rise 3.4% from last year to 18.1 million hectares (45 mil acres).

* The USDA’s monthly Cattle on Feed report will be released tomorrow afternoon. The average trade estimate of cattle on feed as of September 1 is 99.3% of last year (98.5-100.0 range of ideas) and, if accurate, would be the first year-over-year decline in on feed numbers in 33 months, going back all the way to December 2016. The average estimate of August placements is 93.7% of last year (88.9-97.6 range), while August marketings are estimated at 98.3 (97.6-98.8 range).  Groundwork-laying talks between deputy Chinese and US trade representatives get underway today in Washington in preparation for the planned higher-level talks in early October. Ag trade is expected to be a heavy focus, with a source saying, “Sessions on agriculture will get a disproportionate amount of air time.”

* President Trump is set to meet with U.S. senators today in the ongoing biofuels policy discussion/debate. His “plan” to include a reallocation of lost gallons from previous year waiver grants is being met with strong opposition from energy-minded states, while obviously being supported by ag-heavy states.

* Egypt ended up buying 180k tonnes of Russian wheat only in their latest tender, priced at $210.73-$211.20/tonne c% for Oct 21-31 shipment. They passed on offers for Nov 1-10 shipment.

* China sold 259 tonnes of the 3.49 MMT of state reserve corn offered at this week’s auction, bringing total reserve sales to 21.6 MMT so far vs 83.0 MMT at this time last year.

* Please see our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/37408 for details on the USDA Export Sales report.

* U.S. soybean sales were strong at 1.728 MMT (63.5 million bushels), well above reported market expectations of 700k-1.1 MMT, with 593k tonnes reported in sales to China and 548k tonnes to unknown.

* U.S. corn sales were strong last week, as well, at 1.465 MMT (57.7 million bushels), beating market expectations of 900k-1.3 MMT, but were mostly in line with last year’s same-week sales of 54.4 million bushels. Nearly all of this week’s sales, though, were to Mexico at 1.164 MMT.

* U.S. wheat sales were disappointing at a 10-week low of 287k tonnes (10.5 mil bu), coming in below market expectations of 300-600k tonnes and falling sharply from the previous week’s 22.4 million bushels.

* Old crop soybean meal sales of 94k tonnes were within market expectations of 0-200k, while new crop sales were solid at 342k tonnes, beating expectations of 50-250k. Soybean oil sales were as expected.

Weather

No cold air threats remain through the 16-day outlook, even in the Northern Plains. Above normal temps remain expected over the coming 10-day period, with ideas turning back to just average temps in the 11-16 day period vs yesterday’s models showing above average. Average to above rains will fall across the Midwest in the next 10 days.

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