Headlines:
– THE NEXT USDA WASDE REPORT WILL BE OUT OCTOBER 12TH
– EGYPTIAN WHEAT TENDER ATTRACTS MOST INTEREST IN TWO MONTHS
A wheat tender from GASC, the state grain buyer from Egypt, received its highest level of interest in two months, after changes to its quarantine policy. This marks the second tender since Egypt lifted its zero-tolerance policy on ergot, a common grain fungus that can be poisonous to humans in high quantities. Egypt has now changed its policy to allow for a minimum acceptable level of ergot, in line with international policy. Interest was limited at the previous tender, until Egypt also conceded that inspections could be carried out at the port of origin, rather than on arrival, reducing the potential costs of rejected cargoes. The relatively enthusiastic uptake, and the lower premium applied to the offers, suggests that the world’s top grain buyer may be winning back the trust of sellers after weeks of disruption
– SPRING WHEAT FUTURES EXTEND THEIR PREMIUM TO SOFT RED WINTER
This year’s wheat harvest is certainly very big, but protein levels in many areas have been disappointing, including in Russia and the US Plains. So while Chicago wheat prices languish near 10-year lows, prices in Minneapolis, where high protein spring wheat prices, are showing more support. The spread between front-month Minneapolis futures, and December Chicago wheat futures, rose over 129 cents a pound on Tuesday, supported by fresh concerns over the Canadian spring wheat crop.
Summary:
According to the USDA, as of October 2nd, the Soybean Crop is 26% complete and the Corn Crop is 24% complete. As forecasted the tail end of last week brought in dryer weather that allowed farmers to make some headway on the harvest. The previous two months were quite wet and caused some delays but the recent dry weather helped the harvest get closer to being on track. Corn jumped 15% from the prior week’s status but it is still about 3% behind the 5 year average. Beans jumped 10% and is only 1% behind the 5 year average pace. Iowa was among the areas that were hit the hardest from the flooding while that other parts of the Midwest fared much better. Winter Wheat came in at 43% planted and is only about 2% behind the pace of the 5 year average.
Corn futures finished positive today and Soybean futures were down. Wheat was also down but it only lost 1 cent on the day. The US crop ratings for Corn and Soybeans diverged today with Beans moving up 1% to 74% in the good to excellent category and Corn dropping 1% to 73%.
The harvest progress along with the crop rating increase was largely seen as the catalyst for the selloff in Beans today. Also, since the move yesterday appeared to be from short covering its sustainability was suspect. Corn on the other hand looks like it might make a run to about the 353-354 range before finding key resistance. Soybeans were down 10.25 cents and Corn rose 2 cents.
