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Grain Comments: 09.29.23

Pre-report consolidation along with month and quarter end positioning gave us a mixed overnight session. Corn was 1-2 cents lower while soybeans were 1-2 cents higher and wheat was up 2-4 cents. The US dollar was again lower while energies and equities were higher.

 

Today’s Reports: Quarterly Stocks, Chicago PMI

 

  • Corn & Soybeans tend to react negatively to Sep stocks
  • Both contract down 61% of the time following release
  • Wheat has rallied 55% of the time

 

The main story in today’s session will likely be the release of the September quarterly stocks and wheat production data. Trade is expecting to see a mixed bag of numbers compared to last year. Corn inventory on September 1st is being projected at 1.44 billion bu (bbu) compared to 1.38 bbu from September 1st, 2022. Soybean stocks are being estimated at 245 million bu (mbu), well below the 274 mbu inventory from a year ago. September 1st wheat stocks are being estimated at 1.77 bbu, nearly unchanged from last September’s 1.778 bbu. The most interest in these numbers will fall on the soybean inventory as any tightening will cause elevated concerns over new crop ending stocks which are already in a rationing position. Less concern is falling on the grains as they are forecast to be above a level where rationing is warranted. The 2023/24 wheat production estimate will also be released Friday and is expected to come in at 1.732 bbu, a slight decrease from the 1.734 bbu estimate in August. Once this data is released trade will quickly return to harvest reports for price discovery. Trade will also position itself for a potential government shutdown Saturday at midnight.

 

Highlights

* US home values +3.9% over last year

* Brazil sees record high seasonal temperatures

* Heat not slowing Brazil planting

* Lower returns to impact global plantings

* Brazil to expand railways

* 40% of Brazil movement by rail by 2035

* Move will further lower Brazil costs

* US barge freight again rising

* Harvest pressure to build in US next week

* Empty pipeline to limit basis pressure

 

Corn

* Sep 1st stocks est 1.44 bbu

* Sep 2022 stocks were 1.38 bbu

* Weekly export sales 33.14 mbu

* Brazil Sep exports +40% from 2022

* China reportedly buying from Ukraine

 

Soybeans

* Sep 1st stocks est 245 mbu

* Sep 2022 stocks were 274 mbu

* Weekly export sales 24.7 mbu

* Reports of more US sales being cancelled

* US crush margins pressured

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