Morning Commentary - 10/18/2018

Nov soybeans are down 7.0 cents at $8.79, Dec corn is down 1.25 cents at $3.75 and Dec Chi wheat is up 1.5 cents at $5.19.

Good Morning! In a reversal of recent trading action, row crops are a bit weaker while wheat recovers modestly. US weekly export sales will be center stage this AM, while a secondary lite round of harvest pressure is noted.

Producers will begin the process of resuming harvest between now and the weekend, with a much smoother pace expected into early November. Harvest is now behind last year/average, but could easily catch up in the next 2-3 weeks.

Other news is lacking.

Corn & soybeans await fresh combine data. The wheat market awaits confirmation of slowdown in Russian shipments.

Mathematically, Russia wheat exports will slow and eventually halt entirely given record shipments to date and as final production looks to be very close to the USDA’s 71 MMT forecast. Jordan’s wheat tender results reflected a higher price than its last tender in September, but our sources view the result as rather aggressive against quoted fob prices early this week. Russian exporters are still there willing to undercut other origins.

World vegoil markets are lower this AM following Wednesday’s plunge in crude values. Malaysian palm oil futures settled 20 ringgits lower. Soy oil futures are down $.25/Lb. Spot WTI crude is down another $.65/barrel.

The US administration has announced a sort of hiatus in talks with China. A deal was unlikely to be done in 2018. A deal is hoped for, but our stance is that we assume US-China trade barriers will persist indefinitely. 

The EU/Black Sea forecast is wetter in Southern and parts of Central Russia in the near term. ARC’s climate scientist suggests this indeed could be the first meaningful rainfall there in month. However, the remainder of Europe and much of Ukraine will stay arid. ARC’s sources in Europe indicate that planting and emergence are struggling amid concrete-like soils.

The South American weather forecast is rather wet across Central and Northern Brazilian growing issues. Above normal precip is indicated in Mato Grosso and Goais, two key states. And El Nino tends to be very positive or Argentine corn yields.  

Rallies are selling opportunities in corn & soybeans. Tightness in the major exporter wheat balance sheet is more difficult to solve.

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