It doesn't look like many investors are holding out for
bullish data on Thursday.
The US Department of Agriculture is then to release its
latest Wasde report, its flagship briefing on world crop supply and demand, and
a key even for grain markets.
The prospect was not filling investors' minds with bullish
thoughts in late deals on Wednesday, when grains in particular suffered fresh
'Downturn in rains'
For corn, which
for December stood down 0.8% at $3.46 ½ a bushel in Chicago in late morning trading,
not far above the contract closing low of $3.45 ½ a bushel set in late August, the
selling defied USDA data overnight showing the US harvest running at a
historically slow pace of 22% completion.
Forecasts for US 2017-18 corn data in Wasde and (existing figure)
Harvested area: 83.531m acres, (83.496m acres)
Range of estimates: 83.1m-84.0m acres
Yield: 170.1 bushels per acre, (169.9 bpa)
Range of estimates: 168.7-171.5 bpa
Production: 14.204bn bushels, (14.184bn bushels)
Range of estimates: 14.06bn-14.355bn bushels
Year-end stocks: 2.289bn bushels, (2.335bn bushels)
Range of estimates: 2.168bn-2.450bn bushels
World year-end stocks: 201.91m tonnes, (202.47m tonnes)
Range of estimates: 196.7m-204.5m tonnes
Sources: USDA, Reuters
That was below the 29% figure that traders had expected,
besides the 37% of US corn typically in the barn by now.
However, this slowdown was viewed as a temporary hiccup,
with weather improving for fieldwork.
"A downturn in rains in central [Midwest] areas through late
week will allow corn and soybean
harvesting to improve again," said MDA.
Meanwhile, a separate USDA table showing an unexpected
improvement in the US corn condition rating was seen as underlining
expectations of an upgrade in the Wasde to the forecast for the US yield.
The upgrade of 1 point to 64% in the proportion of US corn
rated good or excellent "would support the idea that the USDA could revise its
yield estimate higher in Thursday's report", said CHS Hedging.
At Halo Commodities, Tregg Cronin said that reports from what
corn was being harvested "seem to be confirming the 'better than expected'
narrative, as well as the USDA's rising crop production ideas".
He added that RJ O'Brien research signalled that "history is
certainly on the side" of raised US corn crop ideas in the Wasde.
"There have been 13 years since 1990 in which the USDA
raised the national average corn yield in September [Wasdes] from their August
estimate, and in eight of those years, the October yield was also raised," Mr
"there have been eight years when the USDA raised yields in September from
August, and six of those years saw further yield increases in October", Mr
Forecasts for US 2017-18 soy data in Wasde and (existing figure)
Harvested area: 89.017m acres, (88.731m acres)
Range of estimates: 88.5m-89.82m acres
Yield: 50.0 bushels per acre, (49.9 bpa)
Range of estimates: 49.1-52.1 bpa
Production: 4.447bn bushels, (4.431bn bushels)
Range of estimates: 4.335bn-4.490bn bushels
Year-end stocks: 447m bushels, (475m bushels)
Range of estimates: 375m-500m bushels
World year-end stocks: 96.48m tonnes, (97.53m tonnes)
Range of estimates: 93.9m-98.0m tonnes
Sources: USDA, Reuters
Still, it was some help to soybean futures that the USDA on
Wednesday unveiled the export sale of 396,000 tonnes of US soybeans – 264,000
tonnes to China, the biggest importer of the oilseed, and 132,000 tonnes to
That said, there is a cloud over such demand, with Richard
Feltes at RJ O'Brien noting "more chatter that China may be opting for more
South American soy cargos in view of low protein reported on 2017 US soymeal",
which could indicate a weaker quality US crop.
Soybean futures for November eased by 0.1% to $9.64 ¾ a
'Slowest progress on
In the wheat market,
the prospect of drier weather has boosted the prospect of a pick-up in US
sowings, after unusually slow progress so far.
At 48% complete, sowings are the slowest for the time of
year on data going back to 1995.
Halo's Tregg Cronin said that "individual state progress is
also interesting with Kansas," the top whet growing state, "just 27% seeded
versus 58% average, and the slowest progress on record.
"For a little perspective, the next slowest planting
progress was 42% planted on this date in 1999."
Nebraska planting progress is also the slowest on record,
with Oklahoma's at the slowest since 2001.
Hard vs soft
An interesting nuance on this is that all three states are major
hard red winter wheat growers – with plantings in major soft red winter growing
states in the Midwest faring better.
Forecasts for 2017-18 wheat output in Wasde, (existing figure)
US year-end stocks: 946m bushels, (933m bushels)
Range of estimates: 928m-971m bushels
World year-end stocks: 262.8m tonnes, (263.14m tonnes)
Range of estimates: 258.0m-265.4m tonnes
Sources: USDA, Reuters
"Most soft red winter wheat states are at or ahead of
average," Mr Cronin said.
This observation is "leading some to believe we will see a
decline in hard red winter wheat acres, but stable-to-slightly-higher soft red
winter wheat acres."
There was indeed some reduction in the discount of Kansas City-traded
hard red winter wheat, which for December stood down 0.1% at $4.30 ¾ a bushel.
Chicago soft red winter wheat for December lost 0.2% to $4.34
¼ a bushel, its premium down by 0.5 cents.
In Paris, December wheat stood down 0.95 at E161.50 a tonne in
late deals, depressed also by some strength in the euro, which added 0.3% to
$1.184 per E1.
However, back in the US, New York cotton for December added 0.1% to 69.03 cents a pound, amid ideas
of a downgrade to US supply ideas in the Wasde, as the USDA factors in damage
from hurricanes Harvey and Irma.
Traders expect a downgrade to the estimate for US carry-out
stocks from 2017-18 by 250,000 bales to 5.75m bales, according to a Bloomberg
Meanwhile, cocoa posted gains, and coffee losses, as
discussed elsewhere on Agrimoney.com.