THE OPEN

November beans:  8 higher

December meal:  2.80 higher

December soyoil:  17 higher

December corn:  2 1/4 higher

December wheat:  2 higher

Further reports of Chinese bean buying and more biz announcements today supported bean and meal prices, as well as the other markets.  Oilshare values were weaker as traders bought meal/sold soyoil at the start of the trading session.  Buy corn/sell bean trade was also noted as a minor early trend, but both markets traded to new highs into the report.  Wheat prices broke lower into the report.  

At 11:00 here is what the September WASDE had to say:

U.S. PRODUCTION (Million Bushels) 2020-21

              Sep       Avg         High      Low       Aug       2019-20

Corn          14,900    14,833      15,095    14,625    15,278    13,617

Soybeans      4,313     4,286       4,391     4,192     4,425     3,552

U.S. AVERAGE YIELD (Bushels Per Acre) 2020-21 (WASDE)

              Sep       Avg         High      Low       Aug       2019-20

Corn          178.5     177.7       181.0     174.8     181.8     167.4

Soybeans      51.9      51.6        52.9      50.5      53.3      47.4

U.S. ENDING STOCKS (Million Bushels) 2019-20

              Sep       Avg         High      Low       Aug

Corn          2,253     2,271       2,756     2,128     2,228

Soybeans      575       605         664       561       615

U.S. ENDING STOCKS (Million Bushels) 2020-21

              Sep       Average     High      Low       Aug

Corn          2,503     2,439       2,152     2,697     2,756

Soybeans      460       461         576       379       610

Wheat         926       926         948       900       925

WORLD ENDING STOCKS (Million metric tons) 2019-20

              Sep       Avg         High      Low       Aug

Corn          309.2     311.7       317.5     309.1     311.3

Soybeans      96.0      95.6        96.5      94.0      95.9

Wheat         299.8     302.8       316.8     299.0     300.9

WORLD ENDING STOCKS (million metric tons) 2020-21

              Sep       Avg.        High      Low       Aug

Corn          306.8     310.4       317.0     304.0     317.5

Soybeans      93.6      93.2        100.0     89.5      95.4

Wheat         319.4     316.1       319.0     313.1     316.8

Beans: USDA did not make changes to the harvested acreage despite the derecho event.  20/21 ending stocks of 460 mln bu was near the average guess, and lower than prev. 610 mln bu.  USDA lowered residual use by 2 mln bu.   19/20 exports were raised by 30 mln bu to 1,680 mln bu, while 20/21 was left unchanged at 2,125 mln bu.  19/20 crush was raised by 10 mln bu to 2,170 mln bu.  Worldwide bean supplies were slightly higher, with production rising in Brazil, Canada, and India, while falling in Ukraine. Brazil production was revised higher by 2 mmt to 133.0 mmt, reflecting increased planted acreage spurred on by a weaker Brazilian currency and good Chinese export demand.  

Corn:  Corn exports were raised for 20/21 to 2,325 mln bu from 2,225 mln bu.  Ethanol was lowered by 100 mln bu to 5,100 mln bu.  Feed was lowered from 5,925 to 5.825 mln bu.  Harvested acreage was lowered 500,000 acres from August to 83.5 mln.  Production was in line with expectations at 14.9 bln bu, down 378 mln bu from August.  The stocks-to-use ratio for corn dropped to 17% vs. August at 18.65%.  Global ending stocks dropped from 317.46 mmt down to 306.79 mmt for Sep.  

Wheat:  USDA left 20/21 production and yield unchanged.  New crop wheat ending stocks were left at 925 mln bu, right in line with trade expectations.  USDA left domestic use and demand unchanged from the August report.  19/20 exports were left unchanged at 965 mln bu along with 20/21 at 1,111 mln bu. New crop ending stocks were a bearish feature, coming in at 319.37 mmt vs. 316.79 mmt in August.  World consumption increased 0.8 mmt to 750.9 mln, primarily on higher feed and residual usage for Australia and Canada.   

SOY

• The soy complex traded higher from the start of the trading session.  November beans remained well bid as more reports of Chinese buying activity once again set the market into new highs.  
• Meal gained on soyoil with October oilshare trading to 34.46% as crush traded to 64.31c.  
• Bean spreads remained firm before the report with Nov/Jan narrowing into 3 1/4c.  November beans firmed further as trading commenced as fund buying surfaced on the open.  
• December meal prices gained over soyoil on a good export sales number, with Dec. trading to new highs at $322.00 before the report was released, and up to $324.60 post report.   
• After the report was released, prices continued to surge higher for beans, closing in on the $10.00 benchmark in November as more fund buying took place into increased movement as prices traded higher.   
• The Nov/Jan bean spread narrowed into new highs at 2 1/4c from 4c at the start of the day.  December soyoil prices rallied back towards 34c post report, finding more technical strength courtesy of the bean rally.  
• Towards the end of the session more profit-taking was noted.  

GRAINS

• Corn prices were well bid at the open, and continued to tack on gains in front of the WASDE.  Technically speaking, the corn market gained more constructive signals that lent support to trade.  Funds added to length as prices rose.  
• Corn spreads strengthened into the report with Dec/Dec trading into 19 3/4c from 22 3/4c, while Dec/March traded into 9c from 10c.   
• December wheat prices turned lower before the WASDE, as traders bought corn/sold wheat on expectations of a bullish corn report, but neutral wheat.  Dec wheat/corn traded from 1.84 1/4c down to 1.77c.  
• Corn prices were mixed after the release of the numbers, finding better selling interest as prices neared the $3.70 level.  However, wheat prices turned lower after the report, which kept corn prices from rallying too much.   Funds continued to sell wheat as a possible hedge against the other more bullish markets.  

AT 12:00 THE MARKETS ARE AS FOLLOWS:

                                                                HI                       LO

November beans:  13 higher               9.98                   9.75

December meal:  4.90 higher              324.60               317.20

December soyoil:  38 higher               3385                  3312

December corn:  3/4 higher                 3.69 1/4            3.63 3/4

December wheat:  7 lower                   5.52 1/4            5.40 1/4

November canola:  5.10 higher           518.60              508.70

OUTSIDE MARKETS

The stock market is up 139 pts. with crude oil trading up to $37.82/barrel.  The US dollar trades down to 93.09.

CLOSING COMMENTS

The strength in the market is fairly surprising after the release of mostly neutral numbers.  The implication is that traders may believe that the trend for yields/production may be lower in the October report, seeming to discount today's numbers.  Historically, an October report tends to follow the trend of the September report.  The market is instead focused on the demand pace, and though traders were looking for primary direction from the WASDE, the export sales number seemed to be the key catalyst for trade.  

Trends continue higher and $10.00 beans could be in the cards.  At the same time, harvest is around the corner and markets are overbought.  May want to think about taking length off the table, as harvest weather looks open for the next two weeks.  Time to head into trading ranges though the moral of the story is that good pullbacks should be owned.  Having said that, a healthy pullback would be, (and is needed for), most of the markets.

Have a good weekend...........

 

TAGS – Feed Grains, Soy & Oilseeds, Wheat, North America