Headlines:

  • US flags crop damage from Hurricane Harvey – as Hurricane Irma looms
    In the wake of this summer’s widespread damage to soybeans and other crops caused by the unintended drift from applications of the weedkiller dicamba, Reuters reports that EPA regulators told state officials that they are considering a ban on use of the herbicide after a cutoff date early next year. The idea would be to limit spraying to early spring, before soybeans emerge from the ground.
  • US flags crop damage from Hurricane Harvey – as Hurricane Irma looms
    More details emerged of the damage to US crops from Hurricane Harvey, even as the next hurricane, Irma, approaches the south of the country, with latest forecasts seeing it bringing 150mph winds to Florida. In terms of standing crop, Harvey wrought most damage to Louisiana, data from the US Department of Agriculture showed, showing a 14-point drop to 49% over the week to Sunday in the proportion of the state’s cotton rated “good” or “excellent”. The drop came amid reports of “tidal surge” and heavy rains brought by Harvey, which landed 13 inches on parts of Louisiana last week, leaving 66% of the state with “surplus” topsoil moisture levels, double the level a week before. Nonetheless, one USDA scout reported that “the timing of rain event and overcast weather is what caused problems for crops, especially soybeans that were ready for harvest”. The proportion of Louisiana soybeans rated good or excellent also dropped 14 points week on week, to 56%.
  • Soaring Chinese soybean stocks to curb import growth – USDA
    US officials cautioned over expectations of a substantial rise in Chinese soybean imports, citing the “high” stocks of the oilseed already bought, amid market questions over a slow pace of US export orders. The US Department of Agriculture’s Beijing bureau pegged at 92.5m tonnes soybean imports by China, the world’s top buyer, in 2017-18 on an October-to-September basis. While a rise of 1.5m tonnes year on year, and representing a record high, the forecast is well below the USDA’s official forecast of 94.0m tonnes. It also comes amid persistent market questions over US soybean exports in the new season, with advance orders down 39% year on year.

Summary:

As the USDA continues to access the aftermath of Hurricane Harvey, the grain and oilseed markets have found a bit of support. The recent advance/corrective support was well overdue since all the markets we well extended sitting in oversold positions. All three markets closed in positive territory but they finished well off of their intraday highs. Crude Oil continues to find strength and the key level for the December Crude contract sits at $51. If it is able to post closes above that mark this week we believe that it stands a chance of reaching $53 or even $54. Today, the USDA reported export sales of 253,300 metric tons of Corn for delivery to Mexico for the 2017-18 marketing year.

As of yesterday’s, crop progress report, Corn rated in the dough stage was at 92%, which is 2% behind the five-year average. Corn dented was at only 60%, 8% behind the five-year average nationally and Corn rated mature was only 12%, 6% behind the five-year average. Soybeans are 11% dropping leaves, 1% behind the normal 12% at this time. Soybean conditions were rated unchanged from last week at 61% rated Good to Excellent which well below last year’s 73% rating at this time.