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-US winter wheat conditions above average
-No USDA sales announcements
-Brazil sugarcane allocation expected to remain heavily ethanol biased
-Egypt tenders for wheat – Ukraine lowest offer
-Drier US conditions expected after rain/snow

 Brazilian soybean planting advanced to 31% complete from 20% last week and remains in line with average of 29%, but well behind last year’s exceptionally fast planting of 44% by this time. Mato Grosso is already 65% planted vs 44% average, but MGDS is just 25% vs 45% average and Parana at 48% is a bit behind average of 55%. Brazil’s 1st corn crop is 56% planted, up from 47% the previous week and remains a bit behind average of 62% and last year’s 67%. Argentine corn planting is 32% complete, in line with 31% average, but behind last year’s fast 42% pace.

 Good harvest progress was made across much of the U.S. last week, all things considered, with the expected exception of ND. Impressively, IN and OH soybean harvests are within a few points of average, with only modest delays in IA, IL and MO. More significant delays remain for the Dakotas, MN and WI. 62% of the soybean crop is harvested vs 46% last week and 78% average. The focus was clearly on soybeans last week and corn harvest across the north was minimal with only 5-11% weekly advances made in the Dakotas, MN, WI and IA. Corn harvest delays are clearly more prominent but with a rather dry 6-10 day period ahead, after the current round of rain/snow, activity should begin to pick up. The U.S. corn harvest is 41% complete vs 30% a week prior and 61% average. 20-30% delays are commonplace across the belt, which is no surprise given the exceptionally late planting this spring. See our Market Insights post at https://portal.rjobrien.com/MarketInsights/Blog/Read/37840 for full details of yesterday’s USDA Crop Progress update.

 The first winter wheat crop condition ratings of the year put 56% of the crop as good/excellent vs 53% last year. Overall conditions are slightly better than the 5-year and 10-year averages and are above 6 of the last 9 years’ conditions in late October. Early HRW conditions in KS and OK are considerably better than last year at this time, while NE and TX conditions are worse than last year. SRW conditions in IL, IN and OH are notably lower than they were to start last year’s crop.

 There were no USDA sales announcements this morning.

 COFCO’s Brazilian-based global head of soft commodities said sugar prices would likely need to rise to around 15 cents/pound vs 12.5 currently before Brazilian mills materially shift their allocation of cane processing from the heavy share for ethanol to a higher sugar production share. Last marketing year saw a historically high 65% cane processing go to ethanol production with just 35% for sugar, with a similar mix expected for this year’s crop, as well. COFCO, who owns multiple cane processing plants in Brazil, plans a solid expansion over the coming year to increase ethanol production capacity given the expected continued low sugar prices favoring ethanol production vs sugar. COFCO has capacity to crush 15.2 MMT of cane this season, with expansion plans adding another 1.8 MMT to their capacity for next season. Brazil’s center-south cane production this year is expected to be mostly unchanged from last year around 585 MMT.

 After the close yesterday, Egypt tendered for an unspecified amount of wheat for Dec 5-15 shipment. The lowest offer, freight inclusive, was Ukrainian at $234.60/tonne c&f, followed by Romanian at $235.65/tonne c&f and French at $236.76/tonne c&f. The lowest Russian offer was $237.77/tonne c&f.

 First notice day for November soybean deliveries is Thursday with solid deliveries of 1,000+ contracts expected.

Weather A fairly strong storm looks to spread precip into IA, MO, IL, IN, MI, OH and the SE 1/3 of WI Wednesday and continue into Thursday. Most of the precip will fall as rain, with totals still expected to be in the .50-1.5” range. Snows look to fall on the back side of that precip area and bring totals of 3-7” to the eastern ½ of IA, northwestern ¼ of IL and southern 1/3 of WI later Thursday into Thursday night. Conditions look to quiet down across the Midwest for the weekend and much of next week. Rains of .50-1.5”+ will fall across the Argentine growing regions from northern Buenos Aries north, as well as into the southern Brazilian growing states of RGDS, Santa Catarina and Parana in the next 5 days. Totals in the rest of the Brazilian growing regions look to be generally less than .35”, with coverage of around 55%. The 6-10 day period sees dry weather for most of the Argentine growing regions, with rains of .50-1.5”+ to fall in most of the Brazilian growing regions

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