Morning Grain Market Research
Dan Hueber of The Hueber Report - InsideFutures.com - Thu Oct 10, 9:25AM CDT

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Happy Report Day. I wonder if Hallmark has any cards that would be appropriate for such an occasion, but of course, you would need a supply of both sympathy and celebration messages depending on the recipient. Seeing that will undoubtedly be the key driving force for the session, once again here are trade estimates; Total corn production is expected to come through at 13.636 billion bushels, derived from harvested acreage of 81.57 million and a yield of 167.1 bpa. Last month the USDA stood at 13.799, 82 million, and 168.2. Bean production is expected to total 3.573 billion from harvested acreage of 75.70 million and a yield of 47.15 bpa. In September, Uncle Sam had a production of 3.633, acreage of 75.9, and yield at 47.9. 2019/2020 domestic ending stocks are expected to come through at 1.733 billion in corn compared with 2.190 last month, 508 million for beans versus 640 million, and 1.013 billion wheat instead of 1.014. Globally, corn stocks are expected to tally 297.43 MMT (-8.84), beans to 96.68 MMT (-2.51), and wheat to come in at 285.34 MMT (-1.17). As always, be prepared for at least a couple minutes of nonsense as the numbers are released.

Neither corn or wheat was able to sustain strength for the closes yesterday, but beans did manage to close positive, partially stimulated by a story in the Financial Times. According to their sources, China has supposedly offered to boost the annual purchase of beans from the U.S. by 50% to 30 million tonnes.

Even though the Argentine corn crop is still being planted, the Rosario Grain exchange has decided to lower its estimate. They are now projecting a crop of 47.5 MMT, which is down 5% from last months estimate of 50 MMT. The primary reason for the cut is the ongoing drought conditions, but they also pointed out that the uncertain political situation could prompt a switch to plant lower input cost soybeans.

Conab also issued their first estimate for Brazilian crop. They project total bean production of 120.393 MMT and total corn production of 98.389 MMT. This compares with the USDA estimate last month of 123 MMT beans and 101 MMT corn.

Weekly export sales have been released this morning, and once again, we have a tale of two commodities. Soybean sales were well above the high-end estimate of 1.75 MMT, with total sales of 2,092,500 MT or 76.9 million bushels. Needless to say, the majority of the sales were to China at 1.177 MMT, with unknown destinations purchasing 210k and then Spain for 207.3k. Corn, sadly at the other side of the spectrum, posted sales of just 284,500 MT or 11.2 million bushels. The lowest trade estimate was 500k. Colombia was the top purchaser with 109.3k MT, followed by Japan at 75.6k and then Mexico for 37.6k. Wheat sales fell within the range of estimates but still up 59% for the week with 521,900 MT or 10.45 million bushels. China was the top buyer at 130k (white wheat reported last week), followed by Taiwan with 110.3k and then South Korea in for 80k. I should note as well that China was back in the pork market last week, purchasing 18,800 MT for the 2019 marketing year and 123,400 MT for the 2020 marketing year.

Once we have moved post report today, the focus should quickly shift back to weather and trade negotiations. No changes in the weather outlook as a major winter storm will descend on the Dakotas, parts of Minnesota and Manitoba Thursday through Sunday. If heavy October snow were not bad enough, storms are predicted to also bring strong winds and extreme cold and a threat to both crops and livestock. Makes the rain forecast for here seem like a minor issue by comparison.

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