Soybeans: Bearish news: Brazilian farmers intend to increase soybean acres next season. World soybean production estimates have been revised upward due to increased soybean planting intentions in Brazil and South America.
China has 6 million tons of soybeans stored from last season that must be moved out to store new soybeans. Soybean prices in China are dropping. Chinese soybean imports in August were down 3.5 percent.
The good to excellent crop rating remains 64 percent where 55 percent is average. USDA says ending stocks will remain at 360 million bushels. Weekly export sales were as expected, 848,000 tons.
Bullish news: Soy-meal gained $6 a ton in one day last week. Soy-oil prices also increased. Argentine soybean crush has increased 22 percent in one year.
Private yield estimates are below USDA estimates for soybeans. Soybean fields in the Mid-South look good in many locations and poor in others. It is likely that yields will have an extremely wide range here and that USDA yield estimates will not be realized.
Soybean ending supplies were revised down from 360 million bushels to 300 million, reflecting higher demand. Weekly export inspections were up 6 million bushels near 14 million. China has purchased 150,000 tons Wednesday and Thursday.
Markets anticipate ending supply estimates to drop 70 million tons to 360 million total. Private production estimates are 40 million bushels below USDA at 3.4 billion.
Bullish news: Corn yields have not met USDA projections so far. However, the Corn Belt is barely beginning harvest. The University of Illinois predicts an average yield of 158 bushels per acre. If yields are below 160 bushels per acre in the Corn Belt then ending supplies will drop below a billion bushels and corn supply will be tight.
Traders expect corn yield estimates to drop 2 bushels reducing seasonal ending stocks to near 1.3 billion bushels. USDA reduced corn yield projections 2.5 bushels. Ending stocks are down to 1.1 billion bushels 300 billion below last year. December corn broke through resistance and making a 14 month high. The good to excellent rating dropped 1 percent to 69 percent.
Weekly ethanol production increased 2.5 percent to 875,000 barrels a day. That required nearly 92 million bushels.
Bearish news: Trader profit taking is likely if production makes 13.2 billion bushels. Traders are holding many more buy contracts than sell contracts. Weekly export inspections of 38 million bushels are down from 51 million last week. Weekly export sales 680,000 tons did not meet expectations.
Chinese weekly auction; 1 million tons of strategic reserve corn sold less than 19 percent. Brazil increase corn production estimates 2 million tons to 56 million.
Bullish news: Wheat deliveries are bullish with 3,000 contracts delivered last week. World wheat production estimates have fallen to 642 million tons. That number will keep wheat supply tight for the remainder of this year.
Weekly export sales were huge 1.6 million tons exceeding all expectations. U. S. ending stocks down to 900 million bushels.
Bearish news: Trader profit taking has reduced wheat prices significantly. Without large U.S. export sales, prices may continue lower. Weekly export inspections over 22 million bushels were down from 27.5 million last week but 24 million weekly are needed to meet USDA projections.
U.S. harvest is 76 complete (80 percent is average) adding harvest pressure to prices.
Russia has rain that encourages winter wheat planting. The ban on Russian exports is now resolved to include the 2011 crop. That could change is ample winter wheat production relieves inflation. Canadian wheat supplies are much higher than anticipated.
French wheat is underselling U.S. wheat in North Africa. Egypt and Morocco bought large quantities of French wheat. French sales up 40 percent at 1.3 million tons. World ending stocks are projected at 3 million tons.
Bearish news: Rice harvest is near a peak but pressure on prices has been limited by recent news. Export sales to Iraq were disappointing. Shipments were below expectations at 45,000 tons.
Bullish news: Demand for rice has increased. Vietnam sold 6.2 million tons of rice last week. That has limited Vietnamese supply where they expect to export 6.5 million tons. Pakistan rice exports are limited to approximately 66 percent of normal. Asian and world rice prices have firmed up.
Iraq bought 120,000 tons of Rice. Total sales were 148,000 tons. Buyers expecting low prices at harvest were disappointed. Trader open interest is high at 17,800 buy contracts.
Bullish news: India will limit cotton exports and use domestic cotton in their mills. The damage to cotton in Pakistan is worse than reported. China also has some flood damage to cotton. The U.S. crop is smaller than expected and some quality problems have occurred in Texas.
Trader open interest increased 2,000 buy contracts last week. Booking by farmers has reached a higher than average level after the recent price appreciation. USDA estimates 2.7 million bale ending stocks. That is really tight. Production estimates up 300,000 bales.
Export demand continues to exceed expectations and deliverable stocks sown to 17,000 bales are extremely tight. Harvest is 6 percent complete, and pressure on prices is possible.
Bearish news: The market has a broad trading range near the yearly high. This is likely to increase price volatility. Trader profit taking from large buy positions is limiting upward price appreciation and could start a market correction. Export sales were disappointing.