Harvest Triggers Seasonal Pressure

Morning Outlook

Grains are lower. Approaching US harvest could trigger seasonal pressure. SX is down 6 cents and near 10.37. SMZ is near 341.0. BOZ is near 34.82. CZ is down 2 cents and near 3.76. WZ is down 6 cents and near 5.69. KWZ is down 4 cents and near 5.00. US stocks are sharply lower. Concern over another Europe lockdown and slower US economy is weighing on stocks. US elections and seasonal negative price potential is also offering resistance. Crude is lower. US Dollar is higher. Gold is lower.

For the week, China bot 40 US bean cargos for Dec/Jan , 20 Brazilian bean cargos for Mar-May, and 3 Argentine bean cargos for Apr-May. China probably bot a few Canadian bean cargos also.

Chinese Ag futures (January) settled down 14 yuan in soybeans, up 21 in Corn, up 8 in Soymeal, up 114 in Soyoil, and up 118 in Palm Oil. Malaysian palm oil prices were up 15 ringgit at 3,095 (basis December) at midsession, an 8 month high following Dalian vegoils and higher September exports so far.

The 6 to 10 day forecast for the Midwest sees a front working through over the weekend and bring rains to the region. Models are mixed with their ideas of rain placement. Temps over the next 5 day look to run below average but become more average over the 6 to 10 day period.

Showers and thunderstorms in parts of Brazil and Argentina in the next two weeks will help improve topsoil moisture – at least temporarily – for some early season spring planting.

It is way too early to guess but some expect 2021 corn and bean acres in the US rise. 2021 US corn planted area is ranging from 93-94 million versus 92.0 in 2020, beans ranging from 87-88 million versus 83.8 in 2020. All wheat area in the US is expected at 45.5 million versus 44.3 in 2020 with cotton for 2021 expected at 12.5 million versus 12.1 in 2020. The 4 crops in total should see an estimated 238.5-239 million acres planted versus 220.1 in 2020. Prevent plan 2.9 million acres versus 9.3 in 2020 and 17.5 in 2019.

US Sep 1 corn and soybean stocks will confirm 2019/20 end stocks. Most look for corn stocks near 2,300 mil bu versus USDA 2.253. Soybean stocks are estimated near 580 versus YSDA 575. Wheat stocks are estimated near 2,200 mil bu versus 2,346 last year.

On Friday Managed funds were net buyers of 15,000 contracts of SRW Wheat; bought 10,000 Corn; bought 15,000 Soybeans; bought 7,000 Soymeal, and; net bought 2,000 Soyoil. We estimate Managed Money net long 45,000 contracts of SRW Wheat; long 101,000 Corn; net long 241,000 Soybeans; net long 65,000 lots of Soymeal, and; long 102,000 Soyoil.

 

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