Weekly Market Recap
9/29/2017 2:26:38 PM
Almost all early harvest results are showing yields that are above expectations. Some areas are reporting yields that are very comparable to last year’s records. Harvest has advanced to corn at 11% complete and soybeans at 10% complete.
China plans to invest in ethanol plants but says it will rely on excess stockpiles to feed the plants and won’t rely on imports. The EPA is considering a plan that would allow exported ethanol to generate a RIN certificate to count towards the RFS mandate. Imported ethanol is blended into the fuel supply so those currently generate a RIN. US export sales for corn were just terrible. Only 320,000 tons for the week is really low total for the start of the marketing year when usually the export activity is much stronger. The quarterly stocks report was slightly friendly for the corn market. Analysts were looking for corn stocks to fall between 2.310 and 2.45 billion bushels but the actual number was under the range at 2.295 billion. This was welcoming news for bulls, but the miss wasn’t big enough to give the market a big lift. For the week corn only picked up 2 cents as trade has been very sideways.
Soybean planting in South America is underway but behind average. Private estimates have planting at 1-2% versus about 5% normally. Brazil had been hot and dry, but some recent rains might get things moving. Argentina is finally drying out and planting should get underway there as well. China imported 8.5 million tons of beans in August and Brazil supplied just over 6 million tons of that. US export sales for soybeans were huge. This was the biggest total going back to October of 2013 and a great start for the new marketing year. The stocks report was bullish for the bean market. Analyst were looking for stocks between 321 and 363 million bushels. The actual number of 301 help push the market to a 10 cent gain. For the week soybeans were down 16 cents even with the small rally from the stocks report.
Australia looks to have the smallest wheat crop in 10 years. Excess heat, dryness, and now frost is trimming the crop to 20 million tons which is over 40% lower than last year’s crop. The wheat production report was seen as very bearish. Spring wheat production of 416 million bushels was well above the expectations for 382 million. The worry about the crop being a failure were cast aside with confirmation from this report that things turned out much better than expected. The quarterly stocks number for wheat of 2.253 billion was also above expectations and added to the bearishness in the wheat complex.
Packer margins in cattle continue to remain at sky high levels. Packers are currently making about $135 for each animal slaughtered, and these levels have been sustained for several weeks now. Cash cattle is lightly trading in the $108 range. This is steady with last week.