Crop water use in the Delta and Mid-South has dropped below 0.1 inch, telling us that crops are drying down. Continued rain is adversely affecting yields and quality especially in rice and cotton. Rain and warm temperatures in the Corn Belt are price bearish with increased production potential.
September hog herds were the smallest in three years. Profits are not expected to return to the pork producers before May 2010. Use of feed grains will likely be lower than normal. Market traders are again considering inflation effecting commodity prices.
The global economic recovery is accelerating. Traders are worried about inflation and that supports prices.
Soybean exports remain strong as China continues to buy beans from the United States. Chinese soybean imports in August were down 29 percent from July. China expects soybean imports for September of 2.42 million tons. That is the lowest monthly total in a year.
South American soybean plantings are expected to increase significantly but the amount maybe weather dependant. India has drought problems but most of the soybean growing area in central India has adequate rainfall. The crop there is expected to be near average.
Warm weather in the Corn Belt and the potential to mature the largest soybean crop on record puts pressure on market prices. Nationwide, 40 percent of soybeans are dropping leaves.
Weekly soybean exports were bullish. The high end of market expectations was a million tons. The total was 1.154 million. China bought 654,000 tons of U. S. beans.
Most of the United States corn crop will reach dent stage if warm weather continues. Currently 80 percent of corn has reached the dent stage. Dent stage corn is less affected by freezing. Ninety-seven percent of the nation’s corn crop is now in dough stage. Only 21 percent of corn is mature — 55 percent is average.
Some Iowa farmers are reporting their corn is drying down before reaching full maturity. That will reduce yields significantly if it becomes common. After two freeze warnings did not materialize, corn markets are not responding to weather forecasts as much.
South Korea bought corn from Brazil this week. Chinese corn auction sales are declining, down 25 percent in a week. Taiwan is buying United States corn. The Philippines plans to export 150,000 tons of stored corn supplies. Weekly exports of 673,300 tons were at the low end of market expectations. The range expected was from 600,000 to 900,000 tons.
World wheat supply continues to increase and production estimates are rising. Australia expects to export 14.6 million tons of wheat. That is an increase of a million tons. Russia anticipates exports of 19 million tons. Poland has increased wheat production estimates. Argentina farmers have enough rain to plant more wheat. India projects wheat and rice production to meet domestic needs.
Harvest pressure on the markets continues as more Canadian and United States wheat goes through the combine. Spring wheat harvest is now 85 percent complete. Winter wheat planting is 25 percent complete and that is average. Weekly export sales were 506,800 tons.
India reports rice plantings are reduced 16.2 percent because of inadequate monsoon rain. Indian rice acres have declined from 37.6 million hectares to 31.7 million. The conversion of hectares to acres is approximately 2.4 acres per hectare. India’s monsoon rains are 38 percent below normal.
Vietnam is exporting most of the rice currently traded on world markets. Supplies of stored rice in Thailand are increasing and could adversely affect prices in the future.
Traders are concerned over the late rice crop having harvest delays. The yield and quality of rice maybe affected as rains continue. U.S. rice exports were 45,800 tons last week. Buyers are waiting for prices to fall before importing more rice.
Leading economic indicators predict an upturn in the economies worldwide. The improved economic forecast supports higher cotton prices. Domestic use is projected to be 3.443 million bales. That is almost a million less than last year.
Rain and cool temperatures on the United States Cotton Belt have delayed harvest to a point where yields are affected. Only 7 percent of U.S. cotton is harvested where 12 percent is average. Continued rain is price bullish because cotton yield and quality will be adversely affected.
Chinese cotton imports for the year ending in August were 976,178 tons. Chinese imports are down 40.5 percent in one year. Weekly exports were only 50,600 bales. That is less than market anticipations and price bearish.