Blogging by the Bushel
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CORN – In a surprise development, the US and Canada reached a last minute deal late Sunday on a new NAFTA accord. This agreement should lead to a late November signing ceremony sealing the accords with both Canada and Mexico. The Crop Progress Report on Monday afternoon pegged 86% of the corn crop mature.  Harvest progress showed 26% of the crop in the bin vs 16% last week, and 17% for the 5-year average. Harvest progress should very quickly come back to average as the weather forecast is wet, wet, wet. Corn conditions held steady this week at 69% good/excellent.

Ethanol production dipped this week to the lowest level of the month old marketing year. In 4 of the past 5 years, the lowest production week of the year occurred within 5 weeks of the start of the marketing year.  Seasonally we should start seeing a bounce in production going forward.  The big thing that could derail the bounce would be the margin situation.  Margins are currently at a negative 5 cents, with margins staying in the red since the end of August. Export sales were very good again this week at just over 56 million bushels.  Our newly refreshed NAFTA partners of Mexico and Canada were the two biggest buyers this week. Last year in the first month of the marketing year sales averaged 19.5 million bushels.  This year sales are much stronger and are averaging 59.4 million bushels.

OUTLOOK – The market will be turning its attention to the October WASDE report which is due out on Thursday October 11th.  The range for ending corn stocks is wide enough to drive a truck through.  The range is between 1.7 and 2.3 billion bushels. The other factor is the excess rain the continues to hamper harvest. This has been a story long enough that the market feels like it wants to put in a little bit of risk premium for the delays.

SOYBEANS – The 11th hour NAFTA agreement was a positive input for the market, but that sentiment is not carrying over to the Chinese trade war. President Trump says it is “too soon” for Washington to talk to Beijing about working out a deal on trade as the new tariffs have not yet exerted enough pressure on China to come to the table ready to make concessions. USDA Agriculture Secretary Sonny Perdue says the “US probably made a mistake“ allowing the trade to become too dependent on the Chinese market and that the administration is pursuing new trade deals with many countries.

South America is the big focus right now as their growing season is getting underway. AgRural estimates that Brazil’s 18-19 soybean crop is 4.6 % planted vs 1.5% at the same time last year vs a 2.1% 5-year average. Soybean planting in Brazil’s number 2 soy producing state of Parana is well ahead at 29% complete vs 16% complete last year. A new Reuters poll of analysts and consultants pegs the 18-19 Brazilian soybean crop @ 120.4 million tons, up from an earlier estimate from the same group in August of 119.76 million tons. The group also expects the total soybean planted area in Brazil to rise 3.8% in 18-19 to 36.14 million hectares.  Brazil’s soybean exports could be 79 million tons in the 19/20 marketing year which covers February 2019 to January 2020. Given the high prices Brazil receives from China due to no one else being able to supply them with beans, Brazilian exports will be almost exclusively destined for China.

The Crop Progress Report on Monday afternoon showed 83% of soybeans are dropping leaves vs 71% last week with the 5-year average at 75%. Soybeans are 23% harvested vs 14% last week and the 5-year average at 20%. Harvest is going to slow way down with all of the rain.  We are hearing about some significant damage to beans ranging from 4 to 8% which makes them grade 3 or even 4.  Plus, it is hard to blend them off without a good export program moving beans through the system. So far not a widespread issue, but definitely something to watch.

Export sales for soybeans were surprisingly high this week. Sales of 55.9 million bushels was the highest total of the young marketing year and the best total going all the way back to April. We also saw cancellations to China which is not a surprise at this point.

OUTLOOK – The questions for the bean market next week mirror the corn outlook.  Will the wet weather and further damage reports spur a rally?  For the WASDE report the only question is will the USDA give us a big yield number or a really really big yield number.  Estimates range between 51.8 and 55 bpa.


Australia just suffered the country’s driest September on record. Some rain is forecast for the eastern portion of Australia this week but is predicted to offer very little relief from the prolonged drought. Extended forecasts do not offer much, if any precipitation for the majority of the country. Additional frost and freezes occurred in southeastern Australia last weekend that may have caused new damage to wheat, barley and canola. The potential damage is seen as much lighter than what was caused earlier in September.

Russia continues to push to become an exported of wheat to Algeria. After discussions between the two countries last week, several Russian firms interested in exporting wheat to Algeria, hope to submit wheat samples to Algeria for analysis in hopes of gaining registration access by the end of calendar year 2018. BAGE estimated the Argentine 18/19 wheat crop at a record-high 19.7 million tons, with rains improving conditions last week. 54% of the crop is estimated to have adequate to optimal soil moisture condition. Egypt has tendered for wheat again this week. No surprise that US wheat was not offered as prices remain too high.  There is still no shortage of wheat in the world as a whopping 17 offers were submitted from Russia, Romania, France and the Ukraine.

Crop Progress Report pegged Winter Wheat plantings @ 43% complete vs 28% last week vs the 5-year average of 40%. Winter Wheat plantings for the 5 key HRW states are as follows with the 5-year average noted in ( ): Colorado 67% (65%), Kansas 41% (32%), Nebraska 72% (74 %), Oklahoma 41% (39%), Texas 42% (38%). Winter wheat is 14 % emerged, equaling the 5-year average. Emergence by state with the 5-year average in (): Colorado 39% (31%), Kansas 17 % (11%), Nebraska 31% (41%), Oklahoma 5% (9%), Texas 4% (14%).

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