Headlines:

  • What will the Wasde bring? Grains make small gains, for now
    The, modestly, positive tone around in early deals was there at the close too, as traders proved reluctant to take values too far in any direction ahead of key data ahead. Thursday will bring a slew of ag commodity statistics, starting off with monthly data on Malaysian palm oil production and stocks, followed by the monthly briefing on Brazilian crops from CONAB.But the main event will be the US Department of Agriculture’s monthly Wasde report on world crop supply and demand, with particular interest in revised estimates for US corn and soybean production.
  • Brokers upbeat on corn, cotton, sugar price outlook – but not wheat
    Brokers still see prospects for gains in corn, cotton and sugar futures, but are downbeat on the outlooks for wheat, seeing values next year well below those investors are pricing in. Analysts lifted forecasts for New York raw sugar futures over the past month, by 0.5 cents a pound to a consensus of 16.0 cents a pound, in terms of the average for the October-to-December period, according to FocusEconomics. The upgrade – over a month in which a sugar rally faded after temporarily crossing back above 15 cents a pound – puts the forecast well ahead of the futures curve, with New York’s October contract trading on Wednesday at 13.83 cents a pound. And further ahead, brokers are more bullish too, seeing futures average 16.3 cents a pound in the last three months of 2018, compared with the 15.42 cents a pound being priced in to the October 2018 contract.

Summary:

We saw a bit of role reversal from yesterday’s action today. Corn and Wheat were down yesterday with Soybean moving up marginally. Today it was Corn and Wheat moving higher with Beans down marginally. We anticipated that the action this week could be choppy ahead of the USDA WASDE report tomorrow and it appears that is exactly what we are getting. Weather forecasts remain dry for much of the Midwest and little to no rain is expected for both today and tomorrow in the region. As of late about half of North Dakota is in either an extreme or exceptional drought (that is the worst possible ratings from the US Drought Monitor). Upward of about 13% of South Dakota is suffering from extreme or exceptional drought as well.

Market participants are largely on the sidelines ahead of tomorrow’s WASDE. They are probably looking to not be blindsided by the volatility. The Midwest annual tour of Corn and Soybean fields will begin next week. That, too, looks to play a major role in the price action next week. The Pro Farmer tour take center stage once the WASDE report has passed.