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10/4/24 Commentary:

• Corn and wheat are weaker while soybeans are firmer; feels like a little inter-commodity spreading.

• This week’s export sales were especially strong for corn at 66 million bu. (trade range: 24-39). The U.S. has seen improved year to year sales to several markets (EU, Japan, Mexico and particularly Other W Hemi destinations with the latter so far up 56 million bu./75%). What really gets my attention is that published spot export values/freight puts U.S. PNW corn into Japan at a $4.50/MT discount to Brazil and Gulf corn into the EU $17 cheaper vs Brazil & $12 below Ukraine corn. How long can this continue?

• Dry conditions are likely to impede corn planting efforts in Argentina's main agricultural core over the next seven days, the Buenos Aires grains exchange said on Thursday. Farmers began planting the 2024/25 corn crop last month in Argentina, the world's third-largest corn exporter, and western and northern portions of Argentina's core farming region have suffered from dry conditions in recent months. "Most of the Pampas region (in Argentina) and most of Uruguay will see scarce rainfall (less than 10 millimeters), with pockets of moderate values and large areas with no rain," the grains exchange said in its weekly crop report. The exchange, which estimates the 2024/25 corn harvest will reach 47 million metric tons, has warned there could be cuts to the total area planted with corn if rains fail to bring relief in the short term. As of Thursday, farmers had planted 13.7% of the area meant for corn, the exchange said in a crop status report

• The US east coast port workers strike entered a fourth day today. President Biden claimed progress is being made between labor and employers. Employers have said they are open to new talks after the President publicly pushed employers to raise their wage offer. However, have yet to hear of any new talks being scheduled. Employers have said they cannot agree to pre-conditions for talks but will continue to bargain in good faith to address union demands. The Union Pacific said Ferromex (FXE), the Mexican railroad it interchanges with, has resumed issuing permits for grain shuttle trains at the US/Mexico border crossing at Eagle Pass, Texas. The BNSF Railway has just this week resumed issuing permits for grain shuttles to Mexico.

• The United Nations' world food price index jumped in September, data released on Friday showed, posting its biggest gain in 18 months on the back of surging sugar prices. The price index, compiled by the U.N. Food and Agriculture Organization to track the most globally traded food commodities, rose to 124.4 points in last month from 120.7 in August, the highest level since July 2023 and up 2.1% on the year. The sugar index soared 10.4% month-on-month, driven by worsening crop prospects in Brazil and concerns that India's decision to lift restrictions on sugarcane use for ethanol production may affect the country's export availabilities, FAO said. The cereal price index increased 3.0%, led by higher wheat and maize export prices, while rice prices declined 0.7%.

• Farmers had harvested just 2% of this year's grain maize crop by Sept. 30, well behind the usual pace, data showed on Friday, as rain continued to hamper field work in the European Union's biggest grain producer. After repeated heavy rain delayed maize planting and led to the smallest wheat harvest in 40 years, France's wettest September in 25 years has left some cropland soggy again. The grain maize harvest was trailing year-earlier progress of 23% and was also lagging an average 26% for the same week over the past five years, farm office FranceAgriMer said in a weekly cereal crop report.

• Weather conditions in September remained unfavorable for already started winter grain sowing in Ukraine, APK-Inform agriculture consultancy quoted state weather forecasters as saying. "Conditions of soil preparation for sowing and sowing of winter grain crops in most areas remained unfavorable due to a lack of effective precipitation and a lack of productive moisture in the soil," forecasters said in a report. An abnormal heatwave dominated most regions since early summer and forecasters say that in almost half of the areas for sowing winter crops the topsoil is extremely dry.

CORN:

• U.S. corn export sales notes:
• sales of 66.3 mbu were up more than 3X vs. the previous week (21.1)
• outstanding sales for the 2024/25 (which began Sept. 1) total 513 mbu compared to 461 last year (+11%)

• year-to-date sales to Western Hemisphere destinations are up 9%, while unshipped sales to unknown destinations are up 61% compared to a year ago (99 vs. 62)

• BAGE reported that corn planting in Argentina was 13.7%, up 3.2% v. last wk
• Since 2019, the largest increase in U.S. corn harvested from Sept. 29-Oct. 6 is 11%, which was recorded in 2021

• The Funds sold 5 K—combination of lower wheat, harvest & good yields

SOYBEANS:

• Outstanding export sales of U.S. soybeans for 24/25 (which began Sept. 1) of 598 mbu are up 3.8% compared to last year

• outstanding sales to China are 0.1%, but combined unshipped sales to EU and Africa are 29 mbu compared to only 4 a year ago

• combined old and new-crop unshipped sales of soybean meal are 4.95 MMT compared to 4.60 last year (+8%)

• Dryness is forecast to continue the next 7-10 days in central & north Brazil
• however, a cool front over Oct. 10-12 triggers some thunderstorms with more to follow as the dry season breaks; 1.00”-2.00” totals

• Funds sold 6 K SB, 6 SM; bot 5 BO. Board crush, +$.02 @ $1.78

FINANCIALS:

Dock strike potentially tabled until January; stock futures firming.

WALL STREET FUTURES - Firmer:

Dow, +11; S&P, +14; NAS, +83

Asia - Mostly weaker:

Nikkei, -0.25%; Shanghai, +8.06%;

Hang Seng, +0.81%

EUROPE - Mostly weaker:

DAX, 0%; FTSE, -0.37%; CAC +0.54%

December Gold: $0 @2,679

November CRUDE: +$1.12 @$74.83

Dec U.S. Dollar Index: -0.115 @101.750