COMMENTARY 10/31/14 Happy Halloween!

Another great weekend for finishing up harvest!  In South America, yesterday brought dry weather to Argentina while parts of southern Brazil got ½ to 1 ¼ inches of rain and the north got 1/10 to ½ inch.  Immediate forecasts call for rains over eastern Argentina and central Brazilian soybean areas. The 10-day outlook for Argentina is for average rainfall with a similar pattern for Brazil.  Mato Grosso was reported at 40.5% planted, advancing rapidly since they received beneficial rains last weekend.  Australia was mostly dry Thursday and limited precipitation is in the forecast for the next ten days.

St Louis river levels DROPPING at +10.8 ft  and forecast to be 8.5 by 11/5.

CORN                    

UP 3

Clear sailing for finishing up harvest next week.  Harvest is expected to be called 60% on Monday, up 14 points.  Export demand is not exactly overwhelming with the stronger US dollar.   Morgan Stanley expects Brazil corn area to fall 6% this year as soybean planting progress lags.  Argentina’s corn area is highly uncertain as some expect it down 12-20% as costs rise (USDA:  4.4% less area than LY).  Cordonnier trimmed their production forecast 1 million to 21.0 MMT from impact that inputs have on yield.  Corn acres coming down in South Africa as the Crop Estimates Committee reduces their forecast 3.3%.  The Bloomberg Trader Bias:  Friendly, 30% (28% LW); Negative, 57% (56%); Neutral, 13%  (2%).

Last Monday’s Crop Progress report  at 74% G/E this week, 74% LW, 62%LY. The State of IL   83% G/E vs 83% LW.  US MATURE  was 96% TW, 93% LW, 97% LY, and 97% AVG.  The State of IL MATURE was 100% TW, 97% LW, 100%LY, and 98% AVG.  US HARVESTED 46% TW, 31% LW, 56% LY%, and 65% AVG.  The State of IL HARVESTED 59% TW, 43% LW, 71% LY, and 72% AVG.

 

BEANS     

UP 19   

The market seems less convinced it has resolved tight meal supplies.  Unshipped China U.S. bean purchases surpass last year and other markets at a 13-year high.  The recent sales pace is 24% ABOVE average. The Trade expects soybean harvest to reach 85%, up 15 points on Monday. The Dow and S&P closed at new records on improving economic signals and possibly changing political control of Congress. The last two weeks there have been a HUGE amount of money pouring into grain from the stock market/currencies/energies.  Meal export movement over the past month is down 27% year to year and 20 K MT /week below the 5-year ave.   Rail car delays continue in the Western Corn Belt, slowing movement of soybean complex to consumers.  The Bloomberg Trader BiasFriendly, 38% (23%); Negative, 46% (58%); Neutral, 16% (19%).

Last Monday’s   US BEANS HARVESTED 70% TW, 53 %LW, 75% LY, and 76% AVG.  IL HARVESTED 63% THIS WEEK, 37% LW, 83% LY 77% AVG.

 

WHEAT          

DOWN 4

Timely rains move through the US Southern Plains.  A good part of Texas and Oklahoma’s wheat growing region is forecasted to see some good precip from Tues to Thurs of next week.  There are still crop concerns in Russia, and Australia as well AND the U.S. winter wheat planting drag.  Some see a smaller Australian wheat crop and Russian prices continue to escalate.  The slow pace of Midwest SRW planting is also lending support to futures.  The Ag Attache in Australia took their crop estimate down 1 MMT to 24.0, 1 below the October WASDE report due to sub-par rainfall impact on yields.  The BA Exchange reports Argentine wheat harvest is 5.2% complete and maintains the crop estimate at 11.0 MMT but raises caution regarding possible upcoming freeze damage.

Last Monday’s Crop Conditions Report had US Winter Wheat CONDITIONS  59% G/E THIS WEEK,  NA% LW, and 61% LY.  STATE OF IL CONDITIONS 69% G/E this week, and 0% LW. US WINTER WHEAT PLANTED 84% TW, 76% LW, 85% LY, and 84% AVG.  THE STATE OF IL WINTER WHEAT PLANTED 41% TW, 22% LW, 86% LY, and 75% AVG.  US WINTER WHEAT EMERGED 67% TW, 56% LW, 63% LY, and 62% AVG.  THE STATE OF IL EMERGED 18% TW, 11% LW, 44% LY, and 42%AVG.