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3 Big Things Today, October 2

Grains, Beans Lower in Overnight Trading; China Buys More Soybeans Ahead of Trade Talks.

1. Grains, Soybeans Decline in Overnight Trading

Grains and soybeans were lower in overnight trading after INTL FCStone raised its forecast for corn yield from its previous outlook.

The researcher said Tuesday that it expects corn yield of about 169.3 bushels an acre. That’s up from its September forecast for 168.4 bushels an acre.

Egypt is expected tor release the results of its latest wheat tender in which it sought cargoes of 55,000 to 60,000 tons from international supplies. It’s likely the U.S. will miss out on the tender, as the North African nation has been focused on Russian and Ukrainian wheat in recent months.

The decline in prices is a shift after Monday’s mostly positive reports from the USDA.

Corn inventories on September 1 were reported at 2.11 billion bushels, below trade estimates for 2.43 billion bushels, while soybean stocks came in at 913 million bushels vs. forecasts for 2.32 billion bushels, the USDA said.

Soybean production was pegged at 4.43 billion bushels, down from trade estimates of 4.52 billion and the previous government forecast for 4.55 billion bushels.

The USDA’s Crop Progress Reports showed soybean maturity and the corn harvest well behind their normal paces for this time of year.

Corn futures for December delivery fell 3¾¢ to $3.88¾ a bushel overnight on the Chicago Board of Trade.

Wheat for September delivery lost 5¾¢ to $4.93 a bushel, while Kansas City futures declined 3¾¢ to $4.07¾ a bushel.

Soybean futures for November delivery dropped 5½¢ to $9.14 a bushel overnight. Soy meal lost $2 to $307 a short ton, while soybean oil gained 0.09¢ to 28.97¢ a pound.

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2. China Continues to Purchase U.S. Soybeans Ahead of Next Week’s Trade Talks

China continues to buy soybeans from the U.S. ahead of scheduled trade talks next week, according to several media reports, though the USDA hasn’t confirmed the latest purchase.

On Monday, reports trickled in that China had purchased several cargoes with the final total somewhere around 600,000 metric tons.

So far, the agency hasn’t confirmed that, but it’s logical, as the Asian nation attempts to create some good will ahead of next week’s negotiations.

The market has been mostly positive about the upcoming talks after Peter Navarro, a White House adviser, said reports that the U.S. had planned on delisting Chinese companies from U.S. stock exchanges were incorrect.

China in the past couple of weeks has made several large buys of U.S. beans, making good on promises it made to increase purchases of agricultural products.

On September 27, the USDA reported a purchase of 126,000 metric tons. That followed orders for 257,000 tons on September 26, 581,000 tons on September 25, 260,000 tons on September 17, and 256,000 tons on September 16.

The country is rumored to be considering purchases of another 2 million metric tons of soybeans in the week before the trade negotiations begin, according to Reuters.

Still, some are skeptical about the actual negotiations as the ongoing trade war drags on.

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3. Flash Flood Watches in Effect Through Central Midwest, Freeze Watches in Nebraska, South Dakota

Flash flood watches remain in effect from New Mexico to northern Missouri this morning, while cold weather moves out of the Rockies into western Nebraska and South Dakota, according to the National Weather Service.

In central and eastern Kansas, a flash flood watch continues as more rain is possible this afternoon and early evening, the NWS said in a report early this morning.

Localized rainfall amounts of up to 2 inches are likely in the area and could lead to more flooding.

In western Nebraska, meanwhile, a frost advisory and freeze watch are in effect this morning, the agency said.

Temperatures starting late tonight into Thursday morning are expected to fall to 25˚F. for several hours, the NWS said in its report.

In Nebraska, only 8% of corn was harvested as of Sunday. Western South Dakota also is under a freeze watch as winter weather moves toward the area. At the start of the week, 0% of the state’s corn crop had been harvested, according to the USDA.  

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