COMMENTARY 9/25/2015

**Yesterday China signed agreements to buy 13.8 MMT over the next 2 years**

Warmer to much warmer than normal the next two weeks, although temps should eventually cool.  Rainfall will be limited, allowing for fast harvesting, but leaving winter wheat areas drier than ideal for planting and growth.  In South America, rain increases soil moisture for future planting in Southern Brazil.  Showers in Brazil’s Parana state over the next several days should slow wheat harvest and reduce wheat quality.  Central Brazil should expect showers late  weekend into next week.   Argentina still has potential for rain the next few days that will keep improving soil moisture in the South.

St Louis river level STEADY at +8.6 and forecast  to be 8.6 by  9/30  (Flood Stage is 30.0)

CORN

UP 7

Followed beans higher but was topped out by the fact that US corn is still too high priced in the world market of major exporters.  We should expect to see some pretty good harvest ratings after a great harvest weekend.  Bloomberg’s trade estimates for September 1st corn stocks are at 1.739 bbu, which compares to the USDA’s est at 1.732 and 1.232 bbu last year.    The BA Exchange estimates  that  the Argentine planted corn area could fall as much as 20% this year.  Argentine export corn volume has nearly doubled from last week to 42 mbu, little change from 2014.

Bloomberg Trader Bias:   Bullish 31% (27% LW), Bearish 15% (32% LW), Neutral 54% (41% LW)

 

BEANS     

UP 21

Everyone is excited about China’s letter of intent to buy significant quantities of US beans.  Another USDA Sales Announcement of 260 K MT (9.6 mbu) of 15/16 beans sold to China.  Yesterday China signed agreements to buy 13.8 MMT over the next 2 years.  Time will tell.  China is a big consumer of ysb and ysb products so this IS good news!  Now if only they WILL actually buy them and take delivery…….  Bloomberg’s est for September 1 Stocks at 208, just 2 less than the September WASDE report with a 183-250 mbu range.  This Monday’s Harvest Progress  is expected to be 14-17%, up from 7% LW and 10% last year.

 Bloomberg Trader Bias:  Bullish 16% (4 % LW), Bearish 52% (54% LW),  Neutral 24% (39% LW)                                

 

WHEAT          

UP 10

Dryness in the Ukraine, possible freeze damage in Australia; row crop gains.  According to Bloomberg, the trade expects September 1 wheat stocks of 2.157 bbu, up from 1.907 LY.  The winter wheat planted est is at 35-38%, slightly behind last year’s 43% figure.  The Bloomberg survey puts All US Wheat production up 2.136 bbu, the same as the USDA’s last estimate.

Bloomberg Trader Bias:  Bullish 31% (4% LW), Bearish  15% (50% LW), Neutral 54% (46% LW)