Weekly Market Recap


There have been conflicting reports of the success of lower level trade talks between the US and China earlier in the week. If a trade deal is not reached by October 15th, the U.S. is scheduled to increase tariffs on Chinese goods. On Friday, the U.S. and China reportedly reached a partial agreement that would broker a truce in the trade war and lay the groundwork for a broader deal that Presidents Donald Trump and Xi Jinping could sign later this year. A very early winter storm has pounded Montana and the Dakotas with some areas reporting 2 feet of snow.  Lots of cold air also moving across the corn belt.  This weekend’s low temps will be closely watch as there is still a lot of corn and soybeans at risk of significant damage. 


CONAB is projecting the Brazilian 2019-2020 total corn crop to be 98.389 million tonnes versus 100.046 million tonnes in 2018-2019. The US ag attaché is predicting a crop of 101 million tonnes in 18/19.

Corn inspections were weak, missing the low end of expectations. Inspections are already behind the USDA export pace by 112 million bushels. Corn conditions down 1% at 56% good/excellent vs. expectations for a steady number. Corn dented was at 93% vs. 99% average. Corn mature 58% vs. 85% average. Harvest was 15% complete vs. 27% average and 19% estimated.  Lots of corn still vulnerable to frost/freeze/snow. Corn export sales were really poor falling well below expectations. Demand has been very weak to start the marketing year. The latest WASDE report provided a bearish surprise to the market when the USDA raised the corn yield by .2 bpa to 168.4.  The expectation was a drop to 166.7 bpa. This pushed up ending stocks higher than expected and caused the market to sell of sharply on Thursday.  The market rebounded and took back all of the report day losses on the winter storm and cold temps moving through the corn belt. 



Wheat planting in France is only 4% complete, well below last year’s pace of 15%. But the ag ministry increased the export outlook slightly to 11.7 mmt. Egypt purchases 295,000 tons of Russian and Ukrainian wheat in its latest tender.  No US wheat was offered. Egypt announced that they have 4 months of wheat reserves. 

Winter wheat 52% planted vs. 53% average and 54% expected.  The WASDE report was neutral to slightly bearish at face value for wheat with only a small increase in US and world ending stocks.  Wheat was pulled lower by a bearish corn report on Thursday but bounced back to recapture those losses on Friday.  The winter storm has ended any hope of harvesting the remaining spring wheat.



Soybean inspections were towards the lower end of expectations this week, despite posting a number above a million tons. Inspections are behind the USDA pace by 19 million bushels. China made up just 13% of this week’s total, which indicates other destinations are good buyers. Soybean conditions were down 2% at 53% good/excellent vs. expectations for unchanged. Soybeans dropping leaves was at 72% vs. 87% average. Harvest was 14% complete vs. 34% average and 15% estimated.

Soybean export sales were massive. This is the biggest weekly total since February. China was the main buyer, taking 1,178,000 tons. The October WASDE report was very friendly soybeans.  Harvested acres were trimmed slightly but the big input was a cut in yields from 47.9 to 46.9 bpa.  Ending stocks were cut to 460 million bushels.  The futures were sharply higher upon the report release but the break in corn pulled down the beans.  The bounce on Friday was supported by weather and rumors of a China deal which was confirmed late in the day. 



On the weekly sales data, China showed up with all-time record large purchases of a combined 142,000 tons, shattering the old record.  Monthly data has also shown a huge spike in Chinese pork buying. Hog futures have been reluctant to rally on the good export news. Korea confirmed its 14th case of ASF.  Cash cattle are trading $1-$2 higher on worries the winter storm in the Dakotas will snarl the movement of animals and cause a drop in weights.


An attack on an Iranian tanker in the Red Sea has lifted crude prices.  Also, news that the US was sending troops and equipment to Saudi Arabia supported prices. Oil tanker rates are matching 10 year highs as sanctions have caused a massive shortage in vessels.  AAA is reporting the national average gas price is $2.641 down slightly from last week’s $2.663.  A year ago, prices were up at $2.906.  California is paying the highest price in the nation right now at a whopping $4.18/gallon.