Grain markets this morning are mostly green as strong soybean exports are helping oilseeds, while moisture concerns are helping wheat prices.
“Never mind what others do; do better than yourself, beat your own record from day to day, and you are a success.” – William J.H. Boetcker (American religious leader)
U.S. Soybean Exports on Pace for Record Year?
Grain markets this morning are mostly green as strong soybean exports are helping oilseeds, while moisture concerns are helping wheat prices. Expectations for today’s crop progress report from the USDA is that we’ll see the U.S. soybean harvest at 33% finished (20% a week ago, 28% seasonal average) and the corn harvest at 22% – 24% complete (15% last week, 24% seasonal average).
In the broader markets, the news that U.S. President Trump is faring well after his positive COVID-19 test late last week, and that’s helping put more green on the screen and recover the sell-off seen on Friday. With this see-saw in mind, most talking heads agree that the U.S. Presidential election is going to capture most of the volume of market activity in October.
Soybean Exports see Strong Start
Soybean prices continue to be supported by yet even more soybean exports sales to China, which are now sitting at record pace through Thursday’s report.  Backing up this sales narrative is the reality that total U.S. soybean exports are tracking nearly 60% higher year-over-year with almost 4.7 MMT sailed through Week 4. This 2 data points known, it’s unsurprising that managed money is estimated to now hold, as of this past week, a new all-time record net long position in soybeans. 
There is obviously plenty of grain market participants who think that China could slow down their buying of U.S. soybean exports the moment that the Brazilian soybean crop appears to be doing okay. However, helping the bulls are anchoring on some updated data from Brazil suggests that its largest soybean-producing state, Mato Grosso, could use some rain, and quick as their Plant 2020 campaign is supposed to be hitting full stride right about now.  Nonetheless, U.S. Ag Secretary, Sonny Perdue, said last week that even he has his doubts that China will fulfill all of their Phase One trade deal obligations before the end of the 2020 calendar year. 
Looking forward, on Friday, October 9th, we’ll get the USDA’s updated supply and demand estimates in the form of the monthly WASDE report, and expectations are that we’ll see some adjustments in yields, production, and ending stocks. Production numbers should fall as a further reflection of the hot August weather and final determination of losses from the derecho windstorm. Stocks are expected to change, largely because of the significant changes seen last week in the quarterly grain stocks report from the USDA.
In the September WASDE – which, as a reminder, was supportive of grain markets – the USDA estimated average corn and soybean yields at 178.5 and 51.9 and bushels per acre, respectively. On the private side of things, StoneX recently lowered its estimate of soybean yields to 52.4 bpa, down half a bushel from their previous estimate, in addition to dropping its corn yield target by 0.6 to 179 bpa. Comparably, Informa is pegging corn and soybean yields at 177.8 and 51.9 bpa, both slightly lower from their estimate last month.
Top Combyne Users Private Grain Markets Convo
As a heads up, there’ll be no Breakfast Brief this Wednesday as, that morning, I’ll be having a private, no-question-goes-unanswered grain markets webinar with the Top 10 Combyne users from September. There’ll likely be a similar webinar for our most active Combyne users in October, so to ensure yourself a seat, do these 4 things consistently on the Combyne ag trading network:
- Post Combyne Listings on Combyne (3 options: publicly, private for just your Connections, or to specific Groups of Connections);
- Start chats with other Combyne Listings;
- Grow your Combyne Connections trading network and Connect with existing Combyne users; and
- Invite your trading partners not yet on Combyne to join you and see your deals there.
Even if you’re content with your current grain sales to date, you can still be top Combyne user by getting proactive and building up your trading network on Combyne (see the last 2 points above). Why you’re doing this is, so that when it comes time to pull the trigger on another sale, you can List your deal, and all your trading partners will be automatically informed of your deal terms, quality, etc..
Or, I guess, you could call around, one-by-one, person-to-person, having the same conversation over and over again. If you’re not interested in wasting your time though, posting your Listing and letting your trading partners come to you is the way to go (especially, since they can still call you directly anyways, once they know what sort of deal you’re looking for!)
Strong Wheat Exports & Barley Exports
Wheat futures are finding a bid as dry weather in Europe, the Black Sea, Argentina, and the U.S. Southern Plains are creating concerns of the 2021 crop potential. Also supporting values are the slow pace of wheat exports out of Ukraine and Europe, with the former shipping out only 8.7 MMT so far, or about half of the expected quota for the year.  Conversely, French wheat exports in September were the lowest one-month total in 11 years.  In that line of thinking, FranceAgriMer is expecting France’s non-EU wheat exports to come in at just 6.6 MMT, literally less than half the record 13.5 MMT seen in 2019/20.
Conversely, total U.S. wheat exports, through Week 17 of the 2020/21 crop year, are tracking 4% higher year-over-year with nearly 8.8 MMT sailed. Comparably, total Canadian wheat exports (including durum) are tracking about 14% higher year-over-year with 3.66 MMT sailed through Week 8. Even more impressive though is stronger consistent pace of Canadian barley exports these last few weeks, as, with nearly 410,000 MT sailed, that’s up 160% higher year-over-year!
The demand for Canadian barley exports is certainly supporting barley prices move off the harvest lows. In that vein, there’s certainly strong demand for feed grains still, not only based on trading activities on the Combyne ag trading network, but also prices seen outside the platform.  That said, as the charts below show, feed barley prices are nearly back to the highs seen last spring, while feed wheat prices are already there. In that light, this is a sales indicator for me, and the easiest way to probe your entire trading network for your next deal is to post a Listing on Combyne here!
At 8:25 AM CST in the North American futures markets (*not cash prices*):
(all prices in dollars per bushel unless otherwise indicated)
$1 USD = $1.3304 CAD, $1 CAD = $0.7517 USD)
Dec Corn: +0.5¢ (+0.1%) to $3.803 USD or $5.059 CAD
Nov Soybeans: +1¢ (+0.1%) to $10.218 USD or $13.593 CAD
Dec Soybean Meal (per short ton): -$1.20 (-0.35%) to $350.70 USD or $466.57 CAD
Dec Soybean Oil (cents per lbs): +0.42¢ (+1.35%) to 32.08¢ USD or 42.68¢ CAD
Dec Oats: +0.5¢ (+0.15%) to $2.863 USD or $3.808 CAD
Dec Wheat (Chicago): +7.8¢ (+1.35%) to $5.81 USD or $7.73 CAD
Dec Wheat (Kansas City): +10.3¢ (+2%) to$5.198 USD or $6.915 CAD
Dec Wheat (Minneapolis): +5.3¢ (+1%) to $5.37 USD or $7.144 CAD
Nov Canola: +2.7¢ (+0.25%) at $11.755/bu / $518.30/MT CAD or $8.836/bu / $389.58/MT USD
COMMODITY TRADING INVOLVES RISK AND MAY NOT BE SUITABLE FOR ALL RECIPIENTS OF THIS POST. Neither the information presented, nor any opinions expressed, constitutes a solicitation for the purchase or sale of any commodities. The thoughts expressed in this email and basic data from which they are derived are believed to be reliable, but cannot be guaranteed due to uncertainty about future events and complexities surrounding commodity markets. Those acting on the information are responsible for their own actions.