Corn: Steady to weaker
Soybeans: Steady to weaker
Wheat: Down 1 to 4 cents
General Comment: Corn and soybean futures seen mixed to lower after the early-week rally stalled yesterday amid a dearth of fresh positive news and uncertainty about U.S. corn and soybean yields before the Oct. 10 USDA updates. Wheat continues to struggle with large global supplies.
This morning’s weekly USDA export sales data was at the low end of trade estimates for corn and wheat, but soybeans topped trader forecasts. USDA reported exports sold 2.076 million metric tons (MMT) of soybeans last week, above the 900,000 MT to 1.4 MMT expected and included 1.558 MMT sold to China. Corn sales were 562,600 MT in the week ended Sept. 26, in the middle of the 400,000 to 800,000 MT expected. Wheat sales were 328,500 MT last week, up 16% from the prior week but still down 12% from the four-week average. Traders were looking for 200,000 to 600,000 MT sold last week.
Separately, USDA in its daily export sales reporting service said private exporters sold soybeans and wheat to China. Exporters sold 252,000 MT of soybeans for delivery to China during the 2019-20 marketing year and 130,000 MT of white wheat for delivery to China during the 2019-20 marketing year.
Theirs is some frost and freezing temperatures around this morning in northeastern Colorado through western Nebraska and into parts of the western Dakotas and Montana. the western Midwest and Northern Plains. The heart of the Midwest missed freezing temps. Much of the colder air will stay in Canada but the coolness will slow accumulated growing degree day units and crop maturity after increased cloud cover and rain limited the benefits of warmer temperatures in September from Montana to through northern Iowa, to northern Ohio. Storms that drop heavy rain from Texas to Michigan the past three days is moving out this morning. Another storm moves into the central U.S. Friday and continue through Monday from Oklahoma to the East Coast. Models are divided about the whether things dry out next week. Some of the recent harvest results have been “better than expected” but still mostly down from a year ago. That has raised some caution about expected USDA to make cuts to its crop forecasts next week.
Much of Brazil and Argentina continue to deal with much drier weather. We have not had the same planting progress as there was a year ago. The markets will be watching the weather the next month with moisture deficits becoming a larger concern. Mixed winds in the Indian Ocean and tropical Pacific Ocean continue may continue to limit rains in South America until one becomes dominant.
Trade talks between the U.S. and China are expected to resume next week in Washington, and it’s unclear whether either side is willing to make the concessions necessary for a deal, observers note. Chinese officials and some media reports are still spinning a possible interim agreement that President Donald Trump has made clear he does not support; he favors a comprehensive, enforceable agreement. However, an interim or small-scale deal centered around China buying more U.S. agriculture products and the U.S. postponing planned tariff increases set for Oct. 15 and Dec. 15 remains a remote possibility.
An end to the trade wars is still just a hazy hope, which suffered a setback yesterday when the World Trade Organization gave Trump Administration the go-ahead to impose tariffs on Europe in retaliation for illegal EU government support for Airbus. The WTO approved $7.5 billion of new U.S. tariffs on EU goods for illegal government subsidies for Airbus, the largest award in the largest in WTO history. The U.S. Trade Representative's Office released a list of hundreds of European products that will get new 25% tariffs, including cookies, salami, butter and yogurt - but in many cases applied to only some EU countries, including German camera parts and blankets produced in the United Kingdom. The new tariffs are to take effect as early as Oct. 18. The U.S. Trade Representative's Office said it would "continually re-evaluate these tariffs based on our discussions with the EU" and expects to enter talks in a bid to resolve the dispute. Or maybe the president will try mend relations with Europe to form a united front against China.
The USDA has so far paid farmers $14.03 billion of a promised $28 billion as compensation for the effects of Washington's trade disputes with China, an agency official told Reuters on Wednesday. The agency has paid $5.43 billion from its latest round of trade aid - up from $4.07 billion in mid-September - as of Monday. The agency also has paid out $8.6 billion in the first round of its Market Facilitation Program to date.
Corn: December corn hit resistance at the downside gap from Aug. 13 at $3.88 to $3.92 ¾. A close above this gap would strengthen the short-term outlook after the market was caught short before the bullish Sept. 1 USDA stocks estimates.
Soybeans: November soybean holding above its 200-day moving average after breaking out above that resistance on Tuesday. Despite the drop in the previous session, recent Chinese buying, and Monday’s USDA surprisingly low estimate Sept. 1 soybean stocks provide a floor to losses.
Wheat: December SRW wheat are back testing Wednesday lows and near unchanged for the week. The market continues to lack fresh news to sustain the recent five-week rebound. Egypt's state grains buyer, the General Authority for Supply Commodities, said on Wednesday it bought 60,000 MT of French wheat in a tender for shipment over Nov. 5-15 but passed on wheat for delivery Nov. 15-25. Ukraine will sign its annual memorandum with traders that sets the terms for wheat exports during the 2019-20 marketing year, the deputy minister for economy, trade and agriculture, told Reuters. Specifically, the government promises not to change export rules and traders agree to adhere to any export limits, which they want to rise to 20 MMT from 19 MMT last year.
Cattle: Steady to weak
Hogs: Steady to weak
Cattle: Cattle may drift lower after USDA report beef export sales in the week ended Sept. 26 fell 30% below the prior four-week average while shipments slowed 3% from the prior week. Some cash cattle trade got started in Texas and Kansas at $105 yesterday, up $2 from the bulk of trade last week in these states. But so far, volume has been light. Wholesale beef prices slipped on Wednesday, but sales surged. Choice cutout values fell 50 cents and Select dropped 15 cents. Still, the Choice/Select spread remains over $27.00 and a strong signal the well-finished cattle supplies remain very tight. Slaughter so far this week is down 4,000 head from a year earlier.
Hogs: Look for hog futures to opened steady to easier. Weekly pork export sales were down 4% from the prior week but 44% above the four-week average with Mexico, South Korea, Japan the top buyers. China was not a buyer last week but was the second biggest shipper of pork. China did buy 3,500 for delivery in 2020 last week. Traders were looking for better 2019 Chinese pork sales after announced tariff cuts on imports. Cash hog rose Wednesday with the national average prices up 66 cents and Iowa/Minnesota hogs jumping $1.52. However, wholesale pork cutout values slumped $1.17 led by a steep drop in loins, offsetting gains in bellies picnics. Sales were on the sluggish side and down from earlier this week. That was disappointing with slaughter the first three days of this week up 80,000 head from last week and 70,000 head above a year ago. South Korea's agriculture ministry said on Thursday two more suspected cases of African swine fever have been confirmed. The latest confirmation brings to 13 the total number of cases of detected since the first outbreak on Sept. 17, underlining the urgency of efforts to contain the disease that has swept across Asia since arriving in China last year.