October 4 Afternoon Comments

By Steve Freed

Soybeans closed higher. Word of China buying US soybeans may be helping prices. Corn and wheat closed lower. Weak technical action may be weighing on grains. US financial Market watching Fed action and tax reform talk. World Bank raised est of Asia/ China economic growth outlook.

Soybeans ended higher. Forecast of drier North Brazil weather outlook may have offset weak technical action and talk of higher US 2017/18 carryout. Some feel nearby soybean futures could be in a 9.30-9.80 trading range. Prices could test the lower end of the range if USDA confirms that the US 2017 soybean crop is near 4,430 mil bu and World end stocks are near 97.5 mmt vs 96.0 last year. Post harvest bounce is possible esp if China is a good buyer of US soybeans. Jan-Mar soybean futures price range could be wide and from 9.00-10.50. Key could be South America weather, China buying and money flow from US Fed action, trend in US Dollar and trend in energy prices. EPA mandate ruling and import rules could also impact soyoil prices. Next key price driver is USDA Oct 12 crop report. Weekly US soybean export sales are est near 1,000-1,300 mt vs 2,983 last week.

Corn futures slipped lower. Combination of talk that the US 2017 corn crop may not drop from USDA Sep est and slow export pace may offset slow farmer selling and some concern about Brazil weather. There was some talk that dry weather in north Brazil and wet weather in south Brazil could slow corn plantings and even reduce final acres. Some look for nearby corn futures to try to stay in a 3.40-3.80 range. Market could test or even trade below the lower end of the range if USDA Oct 12 crop report is negative. Could see a post harvest bounce to make sure there is a flow of corn into the domestic demand market. Jan-March, 2018 price range could be wide and between 3.00-4.25. Key could be demand for US corn, money flow which could depend on where US Dollar goes, US tax reform, South America weather, USDA Jan planting intentions report and USDA Feb Outlook Conference outlook numbers. Weekly US ethanol production was up from last week and last year. Stocks were also up from last week and last year. Margins remain positive. Weekly US export sales are est near 500-700 mt vs 320  last week.

Wheat futures closed lower. Talk of lower US demand and negative technical action offers resistance. Weather forecast is favorable for US 2018 HRW planting. There is even some rains forecast for the dry US SRW areas. Word that Russia is expected to grow another record grains crop including Wheat and continues to be World largest wheat exporter also offers resistance. Nearby futures could be in a 4.20 -4.60 range. Jan-Mar, 2018 futures could be in a 4.40-4.80 range. Lack of bullish news could send March down and test nearby support near 4.20. Weekly US export sales are est near 300-500 mt vs 435 last week.

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2017-10-04T19:16:18+00:00 October 4th, 2017|