Weekly Market Recap


On Sept 30th, the USDA will release the Sept 1st quarterly stocks report and small grains report. It will also be month end and quarter end which normally adds to the market volatility. We are seeing the first real chances of frost in forecasts for next week in the northern states, with possible snow along the Canadian border. Wet forecasts for the Pacific Northwest, and much of the corn belt states will hamper harvest progress. The US and Japan signed a long-term trade agreement this week. The deal eliminates or reduces tariffs on certain Ag and food products.


The International Grains Council lowered its global corn production estimate 1 mil tons to 1.099 billion. The European Commission lowered EU corn production estimate 2 mil to 66.5 mil tons.

Export inspections for last week totaled only 9.212 mil bushels. Last year for this week US corn exports were at 53.2 mil bushels. Demand is off to an extremely slow start to the marketing year. Ethanol production decreased by 60,000 bpd this week to 943,000 bpd. This is the biggest weekly drop in production ever. Ethanol inventories decreased by 700,000 barrels to 22.5 million barrels. Margins, however, did recover and are a penny positive.


Brazil may import up to 750k tons of tariff-free (non Mercusor) milling wheat by the end of the year, according to Ministry officials. Forecasts show Australia is dry for the next 2 weeks still, thus raising concerns on the damage to their crops. Australia’s Bureau of Meteorology predicts their east coast will have 3 months of hot, dry weather.  They are forecasting just a 25% chance for average rain from Sept. 30 to Dec.1 with 80% chance for above normal temperatures.  Australia pledged $68 million more in aid to the drought-stricken farmers. Russia raised its wheat crop forecast to 78 mmt from 75 mmt previously, the USDA estimated it at 72.5 mmt.  The EU raised their wheat production estimate 2.3 mmt to 145 mmt, up 12% from last year.

Rains, cold, and possible snow are the weather items the northern HRS market is dealing with along the Canadian border. The remainder of the HRS harvest will be very slow with a substantial hit to quality.


The Chinese government has approved bean meal exports from 7 Argentine plants.  Even with the drop in hog numbers, China is expecting a 3% increase in soymeal consumption due to Chinese pig farmers raising fatter pigs to profit from the soaring prices in China.


Trade now estimates that China has bought between 2-3 mil tons of US soybeans through the end of this week. Official morning announcements show just under 1 million tons. Soybean sales were good at just over 1 million tons. China was the main buyer, taking almost 400,000 tons. These sales are from the latest round of buying.


China announced a third auction of frozen pork from government reserves set for Sept 29th.  Six more cases of ASF reported in South Korea. Early cash cattle trade was $1-$2 higher than last week.  It feels like the feed yards are trying to recapture a little bit of leverage as the packer has been printing money for weeks.  Packer margins have dipped below $300 this week after skyrocketing to nearly $500 right after the packing plant fire.


It was reported that Saudi Arabia offered a partial cease fire with Yemen’s Houthi rebel group, which includes the capital of Sa’na. Iran’s President Rouhani said the US offered to remove all sanctions in exchange for talks, Reuters news reported. Rouhani said Iran has not yet accepted the offer due to the current “toxic atmosphere. The US’s Brian Hook said Iran’s claim of sanction relief is baseless and that the US government remains committed to zero oil exports from the Iranian regime. Gasoline in California is at a 7 year high, as prices at the pump have reached nearly $4.00 a gallon. The average price on Tuesday in San Francisco was $3.89 and is up to $3.94 this morning according to AAA. The large increase in price is due to a refinery outage at Chevron’s El Segunda location.