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3 Big Things Today, October 1
Soybeans Rise, Stocks Below Trade Expectations
Strength in soybean futures continued overnight after the U.S. Department of Agriculture pegged quarterly grain stocks below trade expectations. Corn was little changed.
About 191 million bushels of soybeans were in storage on September 1 in the U.S., well below the 205 million expected by analysts and traders. Corn inventories at the start of last month totaled 1.731 billion bushels, slightly less than the 1.739 billion pegged by the experts. (http://usda.mannlib.cornell.edu/usda/current/GraiStoc/GraiStoc-09-30-2015.pdf)
Having fewer beans on hand than expected always seems to wake up the bulls. In fact, some participants on agriculture.com’s Marketing Talk said it’s possible that harvest lows are in. (http://community.agriculture.com/t5/Marketing/Floor-Talk-September-30-Report-Day/td-p/608822)
But if and how long the rally lasts is anybody’s guess. Demand isn’t exactly stellar – total commitments from overseas buyers are down 35% from a year ago – and price pressure likely will follow the harvest that’s now rolling in Iowa and northern counties of Illinois and Indiana.
November soybean futures rose 2 ¾ cents to $8.94 ¾ a bushel overnight on the Chicago Board of Trade. December soymeal futures fell $1.20 to $307.80 per short ton. December soyoil futures rose 0.40 cent to $27.74.
Corn futures for December delivery gained ¼ cent to $3.88 a bushel overnight in Chicago. Wheat for December delivery gained 4 ½ cents to $5.17 ¼ a bushel in Chicago.
Wheat Builds Own Bull Story on World Weather, Smaller-Than-Expected Stocks
Wheat has become its own story as of late for several reasons.
Dry weather in several countries where wheat is grown is causing unrest in Chicago. A severe lack of precipitation in the Black Sea region, which includes the major producing areas of Russia and Ukraine, and Australia is hindering production forecasts in those areas.
Warm weather is forecast for growing regions of Australia next week, which could further reduce prospects for the country’s wheat crop.
It’s not just the overseas picture that’s causing prices to rise.
Yesterday’s quarterly stocks report showed inventories at 2.089 billion bushels, below the 2.149 billion expected by analysts and traders. As with soybeans, having less wheat than expected is helping to underpin prices on the CBOT.
Still, large world wheat inventories may make traders think twice before buying, and that could eventually lead to some profit-taking.
Central Midwest Weather Harvest Weather Near Ideal For Harvest
Weather in the central and eastern Midwest looks almost ideal for harvest. (http://www.agriculture.com/weather)
No rain is expected at least for the next 24 hours, and temperatures will likely be in the mid-70s in the central Corn Belt, according to the National Weather Service. (www.weather.gov).
It doesn’t get much better than that to start October.
Some rain is expected in extreme western parts of the Midwest, which could slow harvest in those areas, however.
Farmers accelerated harvest last week, with 18% of corn and 21% of soybeans collected as of Sunday, according to the USDA. (http://www.agriculture.com/news/crops/usda-soybe-harvest-speeds-up-cn-slows_2-ar50459)
Winter wheat growers in the western Plains could see some much-needed rain this weekend into next week, which would improve prospects for crops that are going into the ground. About 31% of winter wheat is in the ground. More rain, however, will be needed to improve the outlook for the U.S. crop.
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