Headlines:

  • Bunge cuts profit hopes again – but talk of ‘good momentum’ reassures investors
    Bunge cut its earnings hopes for the second time in three months as the agricultural trading giant followed rival Archer Daniels Midland in flagging disappointing oilseed crushing margins, and slashed hopes for sugar results too. However, shares in the group rose in New York, as the group unveiled better-than-expected earnings for the July-to-September quarter, and underlined that it would report “improved” results for the October-to-December period, and “good momentum” heading into 2018. The group said it was on track on meeting targets for a cost savings drive, flagged improving soy crush conditions and forecast that in South America – after a “difficult” 2017, marked by farmers withholding crops in hope of higher prices – “we expect the industry to approach harvests in 2018 with increased flexibility”. Furthermore, Bunge revealed that it was close to achieving a long-awaited resolution to its beleaguered Brazilian sugar business, saying that the group was “in the final stages of completing [the unit’s] financial separation”. This, along with operational improvements, would “position the segment for an improved year” in 2018.
  • Rabobank lowers bar on Australian wheat export prospects
    Rabobank lowered the bar on forecasts for Australian wheat exports, and canola output, as it highlighted the setback from frost, as well as dryness, to crops. The bank pegged at 20.9m tonnes Australia’s ongoing wheat harvest, a drop of some 14m tonnes year on year and a result which would be the weakest in a decade, but a figure not far from those released by other commentators. The US Department of Agriculture estimates the harvest at 21.5m tonnes, and the International Grains Council sees a 20.5m-tonne figure, while Abares, Australia’s official crop bureau, has put the crop at 21.6m tonnes, but said that a downgrade is in the offing. However, on export prospects Rabobank came in below other commentators, despite concurring on the prospect for stocks left over from last year’s record harvest to underpin volumes.

Summary:

The US Dollar returned to strength today finishing the trading day near 94.80. December Crude Oil futures were only marginally lower and remains in a tight trading range over the last couple of trading days. Corn finished in positive territory today gaining 2.50 cents across the board. Soybean also had some strength today with both the January and March contracts posting 6 cents in gains. Wheat futures were mixed ranging from 3 ticks down to 2.50 cents up.

Brazil exported 5,028,247 metric tons of Corn in October. This was below the 5.9m metric tons reported in September but significantly higher than the 1.1m metric tons in October of last year. US Ethanol stocks were up by 400k barrels in today’s EIA report bring the total to 21.5 million barrels. Monthly ethanol production for the month of August came in at 32.431 million barrels. Brazil exported 2.49 million metric tons of Soybean in October which was a far cry from the 4.27 million metric tons exported in September. Last year, Brazil exported 1.0 million metric tons of Soybeans in October.