The US weather forecast remains warm and dry for most of the Midwest, which should allow harvest to advance quickly. This may result in more hedge pressure, limiting upside price potential. As of last Sunday, harvest was reported to be 30% complete.
In a flash sale this morning, private exporters reported sales of 126,000 mt of corn for delivery to unknown destinations during the 24/25 marketing year.
US August ethanol exports increased 3.8% above July and were also 41% above August of last year. For the first eight months of 2024, US ethanol exports are up 38%. Additionally, US exports of dried distillers grains are up 15% for the same timeframe (versus 2023).
The Chinese stock market on Wednesday fell with the highest daily losses since the covid pandemic began. This may be in part due to disappointment with Beijing’s economic stimulus efforts. This may also have a ripple effect that weighs on US markets.
The European weather model has increasing rainfall for Mato Grosso, Brazil in the 6–10-day timeframe. The improving weather conditions should minimize crop planting delays, but this may also limit upside for US grains, with the thought that Brazil will still have large crops.
The lower crude and palm oil markets have pressure on soybean oil futures, which in turn may weigh on soybeans themselves. Soybean meal has also seen a recent downturn, as US meal FOB export values are at a $34 per mt premium to South America.
Wheat managed a positive close yesterday in the face of a negative trend for majority of the grain complex. At midday today, wheat is also the upside leader. Recent increases in Black Sea tensions may be offering support, with two reported Russian attacks on grain vessels to start this week, within the same number of days.
Most of the US wheat areas remain warm and dry, raising concerns about establishment of the winter wheat crop. As of last Sunday, the USDA said 51% of the crop is planted, with 25% emerged.
Paris milling wheat futures gapped higher on Wednesday, offering support to the US market. Like US futures, this jump may be factoring in more war premium. However, global weather issues are also supportive to prices; the Black Sea area remains too dry, the EU is too wet, and Australia has seen recent dryness and frost damage.
Grain Market Insider is provided by Stewart-Peterson Inc., a publishing company.
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