Good morning.
Corn and soybean futures have had small ranges and light volume so far in the overnight trading session to kick-off the new week. A continued wet forecast for South America, as well as slightly better forecast rains in parts of Russia’s wheat belt, have been the main catalysts for the selling so far on Monday. Early this week, traders will have an eye towards Brazil’s monthly crop update for October, which is due out tomorrow morning and will give the first state-by-state look of the year for new-crop production and area estimates. Tensions in the Middle East – or the perceived lack-there-of – also look to continue influencing the markets, as crude oil futures have shed about $2 already this morning on ideas that all-out war might yet be avoided. Corn futures are trading 2-3 cents lower to start the week, soybean futures are down 3-4 cents, and the Chicago wheat market is down 1-2 cents. Products are lower, soybean meal is down $1-2/ton, and soybean oil is down 50-60 points. Outside markets are mixed, crude oil futures are down around $1.70/bbl, the Dow Jones index is down 70 points, and the US$ index is up 20 points. The S&P500 is up 10 points, and the NASDAQ is up 60 points. The S&P made new contract highs again overnight.
Friday afternoon’s CFTC commitment of traders report for the week ending October 8th showed managed money traders are now net-short 23,729 contracts of corn (+43,971), net-short 21,798 contracts of soybeans (+13,088), and net-short 29,449 contracts of Chicago wheat (-6,496).
In soy products, funds are now net-long 32,503 contracts of soybean oil (+16,700) and are net-long 96,588 contracts of soybean meal (-6,621). Of note, this is the first time funds have been net-long across the combined grain and oilseed space (corn, beans, all three wheat classes, meal, and oil) since September of 2023.
In a closed door meeting with Russian grain exporters last week, the Russian Ag Ministry instructed exporters not to sell wheat below the $250 FOB level; instructions were also given not to involve third parties in transactions, and also not to provide Russian grain to foreign firms that won tenders below the new price floor.
Staying in this part of the world, private analysts continue to cut production estimates here; Russian wheat crop is now seen at 81.5 mmt’s according to SovEcon, down from 82.9 mmt’s previously.
According to a Bloomberg survey, traders see tomorrow’s Conab report showing Brazil soybean production in the coming season at 166.24 mmt’s on 47.0 mil hectares. Total corn production is seen at 121.5 mmt’s on 21.16 mil hectares. USDA last week pegged Brazil soy at 169.0 mmt’s and Brazil corn at 127.0 mmt’s.
China’s Finance Minister over the weekend told reporters that the central government has room to increase both debt and the deficit, but otherwise again fell short of giving much in the way of specific details to any of the plans or proposed policies. He also mentioned more stimuluses continues to be on the way, which Asian markets took as positive.
Equity markets don’t see a ton of US-specific data on the table for this week but will be tuned into the European Central Bank’s policy meeting on Thursday, where rate cuts are expected for a third straight meeting. Other global happenings this week include a GDP update for Q3 out of China on Friday.
Rainfall in South America over the last 72 hours favored central and northern Brazil, while most of Argentina was dry save for a small pocket from Cordoba to Buenos Aires that picked up rather heavy rains of up to 6″ in places; totals in Brazil ranged from a tenth or two to up to 3-4″ generally speaking.
Over the next week, forecasts show the possibility for an additional 2-4″ of rainfall for most of central Brazil, while southern Brazil into northern Argentina sees a slightly lesser 1-3″. Rains have helped cool things a bit in Brazil also, as temps over the next week are now seen average to slightly below average for central and eastern areas; Argentina though will be hot.
Light showers fell across the far northern/northeastern US over the weekend with totals of 0.01-1″ generally speaking, but dry conditions otherwise remained in place for the rest of the country.
For this week, models are in fair agreement on light rains for the western half of the US, though the Corn Belt will remain mostly dry. Temps will be well below average through most of the week with highs in the 50’s/60’s but will warm back up to slightly above average for mid-October by this weekend.
Week-two forecasts continue to trend wetter in the mid-section of the country but run-to-run variability and how far out the forecasts are keeps confidence low over the short term. Whether these wetter forecasts last through this week will be closely watched for.
As a reminder, there is no crop progress update due to the Columbus Day holiday; weekly crop progress will be out Tuesday afternoon at 3pm central time.
Have a great day.
Grain Comments: 10-14-2024
Good morning.
Corn and soybean futures have had small ranges and light volume so far in the overnight trading session to kick-off the new week. A continued wet forecast for South America, as well as slightly better forecast rains in parts of Russia’s wheat belt, have been the main catalysts for the selling so far on Monday. Early this week, traders will have an eye towards Brazil’s monthly crop update for October, which is due out tomorrow morning and will give the first state-by-state look of the year for new-crop production and area estimates. Tensions in the Middle East – or the perceived lack-there-of – also look to continue influencing the markets, as crude oil futures have shed about $2 already this morning on ideas that all-out war might yet be avoided. Corn futures are trading 2-3 cents lower to start the week, soybean futures are down 3-4 cents, and the Chicago wheat market is down 1-2 cents. Products are lower, soybean meal is down $1-2/ton, and soybean oil is down 50-60 points. Outside markets are mixed, crude oil futures are down around $1.70/bbl, the Dow Jones index is down 70 points, and the US$ index is up 20 points. The S&P500 is up 10 points, and the NASDAQ is up 60 points. The S&P made new contract highs again overnight.
Friday afternoon’s CFTC commitment of traders report for the week ending October 8th showed managed money traders are now net-short 23,729 contracts of corn (+43,971), net-short 21,798 contracts of soybeans (+13,088), and net-short 29,449 contracts of Chicago wheat (-6,496).
In soy products, funds are now net-long 32,503 contracts of soybean oil (+16,700) and are net-long 96,588 contracts of soybean meal (-6,621). Of note, this is the first time funds have been net-long across the combined grain and oilseed space (corn, beans, all three wheat classes, meal, and oil) since September of 2023.
In a closed door meeting with Russian grain exporters last week, the Russian Ag Ministry instructed exporters not to sell wheat below the $250 FOB level; instructions were also given not to involve third parties in transactions, and also not to provide Russian grain to foreign firms that won tenders below the new price floor.
Staying in this part of the world, private analysts continue to cut production estimates here; Russian wheat crop is now seen at 81.5 mmt’s according to SovEcon, down from 82.9 mmt’s previously.
According to a Bloomberg survey, traders see tomorrow’s Conab report showing Brazil soybean production in the coming season at 166.24 mmt’s on 47.0 mil hectares. Total corn production is seen at 121.5 mmt’s on 21.16 mil hectares. USDA last week pegged Brazil soy at 169.0 mmt’s and Brazil corn at 127.0 mmt’s.
China’s Finance Minister over the weekend told reporters that the central government has room to increase both debt and the deficit, but otherwise again fell short of giving much in the way of specific details to any of the plans or proposed policies. He also mentioned more stimuluses continues to be on the way, which Asian markets took as positive.
Equity markets don’t see a ton of US-specific data on the table for this week but will be tuned into the European Central Bank’s policy meeting on Thursday, where rate cuts are expected for a third straight meeting. Other global happenings this week include a GDP update for Q3 out of China on Friday.
Rainfall in South America over the last 72 hours favored central and northern Brazil, while most of Argentina was dry save for a small pocket from Cordoba to Buenos Aires that picked up rather heavy rains of up to 6″ in places; totals in Brazil ranged from a tenth or two to up to 3-4″ generally speaking.
Over the next week, forecasts show the possibility for an additional 2-4″ of rainfall for most of central Brazil, while southern Brazil into northern Argentina sees a slightly lesser 1-3″. Rains have helped cool things a bit in Brazil also, as temps over the next week are now seen average to slightly below average for central and eastern areas; Argentina though will be hot.
Light showers fell across the far northern/northeastern US over the weekend with totals of 0.01-1″ generally speaking, but dry conditions otherwise remained in place for the rest of the country.
For this week, models are in fair agreement on light rains for the western half of the US, though the Corn Belt will remain mostly dry. Temps will be well below average through most of the week with highs in the 50’s/60’s but will warm back up to slightly above average for mid-October by this weekend.
Week-two forecasts continue to trend wetter in the mid-section of the country but run-to-run variability and how far out the forecasts are keeps confidence low over the short term. Whether these wetter forecasts last through this week will be closely watched for.
As a reminder, there is no crop progress update due to the Columbus Day holiday; weekly crop progress will be out Tuesday afternoon at 3pm central time.
Have a great day.
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