Dec corn down 1 ¼ at $3.625
Nov beans up 4 ¾ at $8.505
The DOW is up
USD is stronger
Crude oil down $.44 at $71.84
Corn bulls continue to point to strong U.S. demand. There are also some weather related hiccups in a a few areas that will delay harvest and or create some late yield complications. The USDA reported another large sale of corn (239,630 MTs) to Mexico. There was also a sale recently announced to “unknown” destinations, which makes some in the trade scratch its head. I’m also hearing of some position squaring ahead of Friday’s USDA Quarterly Grain Stocks report. There are no domestic or global balance sheet adjustments in this report, those will come in the October 11th WASDE. This report will be more of a census of what’s taking place and an attempt to tell us how many of last year’s bushels were still on hand as of September 1st. For corn it’s going to come down to the Feed and Residual number. The average estimate of September 1st U.S. corn stocks is just above 2.0 billion bushels, with the range of guesses somewhere between 1.95 and 2.1 billion. This compares to last year’s 2017/18 ending stocks estimate of 2.002 billion. An announcement for year-round E15 could also be on the nearby horizon. The short term trend for December corn is positive. Expect a test of 366-370. Closing under 350.75 alerts for a drive to new lows. Long Dec corn, system traders will find sell stops around 355.5.
Grain Animal Consuming Units (GCAU) were placed at 100.432 mln units; the first time this number has been a triple digit figure. High Protein Animal Units reached a new high as well. That growth is being driven by cattle in feed, hogs and poultry along with other cattle. Despite the largest ever increase in animal units, corn for feed demand is estimated at 5.575 bln bushels well below what was noted in the early 2000’s- pre ddg’s.
Nearly 1.4 billion gallons of ethanol valued at $2.37 billion were exported worldwide. Top customers included Brazil, Canada, India, the Philippines and China. This export figure beats the previous record of nearly 1.1 billion gallons exported in marketing year 2011/2012, before USGC developed an ethanol program. Additionally, the U.S. market share of total global ethanol exports jumped from 50 percent in 2016 to nearly 65 percent in 2017.
Soybean bulls continue to point towards Argentine crushers buying more U.S. soybeans and some rumors of Brazilian buyers sniffing around a bit in the U.S. market. There’s also talk of “unknown” buyers currently stepping in and buying small doses of U.S. soy, perhaps the Chinese? As I mentioned earlier this week, there’s talk that U.S. soybeans out of the PNW pencil into China even with the current 25% tariffs. All of the nontraditional moving parts in the export space has the trade a bit confused and desperately trying to figure out total demand. Some are saying the recent rally is due to short-covering ahead of Friday’s September 1st Quarterly Stocks report, which most are estimating in a range of between 380 and 480 million bushels. Most in the trade show the average estimate somewhere just north of 400 million bushels. Bears continue to see rallies as being somewhat limited by several important ingredients: Ongoing trade battle with the worlds #1 buyer of soybeans, hence fewer U.S. exports; Record setting U.S. harvest currently in motion; Record setting soybean acres currently being planted in Brazil; Shrinking Chinese hog herd and spreading African Swine Fever, which could work to decrease Chinese demand. The bears could also talk about the current record setting U.S. ending stock number, strength of the U.S. dollar, macro fear surrounding a global slowdown, etc… Tough market to call with both sides posting legitimate arguments. ). The technical trend for Nov beans is positive but near an overbought condition. A close over 854.25 is constructive. Closing under 828.5 alerts for a move to new lows. Getting a buy signal early Tuesday in November beans, under water system types are likely to find sell stops around 829.25.
The privately owned trading house LDC said on Tuesday that chief executive Gonzalo Ramirez Martiarena had resigned after three years in the post to “pursue other opportunities, and chief financial officer Armand Lumens had quit for “personal reasons”. Their departures are likely to fuel speculation of a disagreement over strategy and investment plans with Margarita Louis-Dreyfus, the widow of Robert Louis-Dreyfus, whose family founded the company in 1851. Ms. Louis-Dreyfus has been quietly increasing her grip on the Dutch-registered company since the death of her husband in 2009, increasing her stake in Louis Dreyfus Holding — LDC’s parent company — to 80 percent from 65 percent. That will rise to 96.6 percent once a buyout of the family shareholders is completed.(Source: Financial Times)
U.S. consumers, businesses and government entities spent $1.62 trillion on food and beverages in 2017. Spending at food-away-from-home establishments — restaurants, school cafeterias, sports venues, and other eating places — accounted for 53.8% of these expenditures, and the remaining 46.2% took place at grocery stores, super centers, convenience stores, and other retailers. The away-from-home market, which accounted for about one-third of total food expenditures 50 years ago, saw its share grow through the decades, except in some recession years. (Source: USDA, ERS)