Headlines:

  • Corn, soft commodities better bets than soy, wheat, says Rabo
    Corn and soft commodities – bar cotton – look better bets for price rises than soybeans and wheat, according to Rabobank, which said it was “slightly bullish” on sugar, and “bullish” on coffee despite boosting supply estimates. Among grains, the bank said that wheat prices faced “an uphill struggle into early 2018”, cutting its forecast for Chicago futures by up to $0.20 a bushel on a quarter average basis, leaving them roughly in line with levels investors are factoring in. For the April-to-June quarter of next year, for instance, the bank forecast prices averaging $4.70 a bushel, compared with the $4.67 ¼ a bushel May futures were trading at on Tuesday. “Wheat futures remain under significant pressure following the arrival of the northern hemisphere harvests and a projected fifth year of global stock building,” the bank said. “Global export business remains particularly competitive,” although a rise in Russia offers, up 6% since September to $195 a metric ton, “looks to alleviate what was previously a single origin market”, with the former Soviet Union in control after its record harvest.
  • Sharp dip in Brazil sugar output sends futures soaring
    Raw sugar futures bounced back above 14 cents a pound after data showed an unexpectedly weak start to October for Brazilian output, undermined by a drop in cane quality as well as a switch by mills to making ethanol. Raw sugar futures for March jumped 2.9% to 14.28 cents a pound in New York, closing above both their 10-day and 20-day moving averages for only the second time in the past month. The gain followed the release by Unica, the Brazilian cane industry group, of data showing that mills in the country’s Centre South region, responsible for more than 90% of domestic output, produced 1.98m tonnes of sugar in the first half of this month. That represented a plunge of more than 30% on output in the second half of September, besides being a 12.3% drop year on year. It was also below the figure of 2.03m tonnes that investors had expected, according to a poll by S&P Global Platts.

Summary:

The recent harvest had seen its share delays but despite the setbacks USDA numbers continue to weigh down prices. It looked like prices might gain some traction yesterday but there was little follow through today from the prior day’s advances. Soybean were down 4 cents today. Corn and Wheat were only up 1.50 and 2.00 cent respectively. Soybean was particularly weighed down because of the strength of its harvest last week. It gained 21% of ground and is much closer to the 5 year average pace than Corn is. The harvest looks to continue to proceed without many hang ups the next few weeks with weather projected to be cooperative. The seven-day forecast for the U. is below-normal temps for the next two weeks. Precipitation is forecasted below normal the next seven days but that is still good harvest weather.