Oct 9 Morning Ag Commentary

by Steve Freed,

Grain calls are mixed. CZ is down 1 cent and near 3.95. WZ is down 1 cent and near 4.99. SX is up 6 cents and near 9.27. US Dollar is lower. Crude is higher.

Grain market has a lot to consider; USDA report, China and US trade deal or not, US and South America weather, global recession and lower US interest rates.

China is still open to agreeing a partial trade deal with the United States, Bloomberg reported on Wednesday, citing an official with direct knowledge of the talks, despite the recent blacklisting of Chinese technology firms. Chinese officials are offering to increase annual purchases of U.S. agricultural products by $10 billion as the two countries seek to resolve their trade dispute, the Financial Times newspaper reported.

Wire story was commenting some market participants have been waiting for the U.S. Department of Agriculture to finally acknowledge that the 2019 U.S. corn and soybean harvests will not be as large as the agency has previously stated, primarily due to historically late planting and crop development; but industry analysts polled ahead of USDA’s next update, set for Thursday at noon EDT, do not see an extraordinary amount of further downside for the harvests.

In the last 25 years, October corn yield has landed more than 2 bpa below the September figure only four times; the 2010 deviation was the largest at 6.7 bpa, and corn yield landed 4.5 bpa lower in 1995; the other two years were 1993 and 2000.

For soybeans, there are only three instances in the last quarter century where October yield was at least 1 bpa lower than in September; the biggest deviation was 2.4 bpa in 2003, when an aphid outbreak significantly reduced yield; the other two years were 1995 and 1998.

The U.S. Midwest weather forecast continues with dry weather through today before rains advance through the region into Saturday where lesser amounts of rainfall will be seen in the east. An early season blizzard is still seen for the Northern Plains. Drier weather looks to build back in next week. Temps will be falling to below average through the period.

The Southern U.S. Plains had no major changes with rainfall running above average in the eastern areas of the region with little in the way of rainfall for the rest.

The U.S. 11 to 16 Day Outlook looks for an active pattern of above average precip and average to below average temps for the Plains and Midwest.

The South American weather forecast now calls for rains to fall across most of the Argentine growing regions with only the far southern sections remaining dry. Rains also look to fall in some of the sections of southern and northern Brazil. The 6 to 10 day forecast has rains to fall in the same areas as Argentina and Brazil as over the past 5 day forecast.

The information conveyed by ADMIS or its affiliates to the audience is intended to be instructional and is not intended to direct marketing, hedging or pricing strategy or to guaranty or predict future events, including the pricing and pricing movements of commodities and commodity futures contracts.

2019-10-09T13:18:41+00:00 October 9th, 2019|