The grain markets are enjoying some early session strength, one of the stronger overnight sessions we have seen in a while.
Technical buying ahead of tomorrow’s Quarterly Stocks report is forcing speculators to cover shorts.
The trade continues to search for flash export sales announcements following rumors of large Chinese bean purchases and yesterday’s announced corn sale to Mexico.
Yesterday’s sale of 62.09 mb of corn to Mexico was the 4th largest daily sale ever and a record sale to Mexico. The largest corn sale ever was to the former Soviet Union to the tune of 146.4 mb (1991).
The outside markets are mostly quiet with equities, crude oil and the dollar all holding near unchanged.
Crude oil enjoyed one of the largest rallies of the year on Wednesday (up 5.4%) following news that OPEC will attempt to curb output. If (a huge IF) a production cut is actually obtained, it would be the cartel’s first move to cut production since 2008.
There continues to be an on-going concern of crop losses and quality issues with the Australian wheat crop. Heavy rains, especially along the eastern growing regions, have taken a toll on the crop. The Aussie Bureau of Meteorology continues to predict above average precipitation for the region.
The S. African government is in the process of relaxing rules for importing US GMO corn following the recent drought. Final decisions will be announced by October 5th.
A U.S. district court judge in Kansas ruled lawsuits brought by U.S. farmers against Syngenta AG over the sale of bio-tech corn seed not approved for import by China can proceed as a class action.
China’s Golden Week Holiday begins on October 1st and will run through the 7th.
Short-covering rally / minor tech buying ahead of tomorrow’s report.
Weekly export sales were above estimates for beans; below for corn.
In addition to the Q. Stocks report, FND for Oct futures is also Friday.
Quarterly Hogs and Pigs report will be released Friday afternoon. More Comments Grain prices are trading on the higher side on what has been a steady to mostly lower week for prices so far. Some short covering is being seen ahead of the stocks report as well as the end of the month and quarter. Crude is back down slightly this morning but did see a big rally in that market yesterday. There is some talk that beans and the products are trying to catch up to that. The dollar is mixed. The USDA will update quarterly stocks as of Sept. 1st tomorrow and also give a final look at 2016 wheat production. This will be released at 11:00 a.m. tomorrow. What once looked like a clear week for harvest for the eastern belt has now turned wetter with Illinois seeing some current and/or expected light rainfall for the rest of the week. Temps are expected to warm again next week, with rain chances more mixed. Rain looks to favor the far eastern belt over the next week. Spend the last couple days in Ohio where harvest is still slow to get started. We left Ohio yesterday in rain so looks like harvest will be slow to get much traction this week. It is still early there, but the folks that we visited with there thought that the USDA was likely a little high on their yield estimates. Bean sales this morning were good at 62.1 Mln. bu. Corn sales were just ok at 22.6 Mln. bu. Wheat sales were solid at 21.0 Mln. bu. Some additional export announcement could be seen before then, but China will be on holiday all next week so news out of them will turn quiet. It is expected to be mostly a technical day ahead of the numbers tomorrow. Next week will bring more harvest talk and the start of the anticipation for another production estimate from the USDA on Oct. 12th.
Estimates for Friday 9/30 Stock Report
USDA – Sept ‘16
USDA – June ‘16
USDA – Sept. ‘15
USDA – Sept ‘16
USDA – Aug ‘16
USDA - 2015
Comments from Mid-Co Commodities.
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