Market Commentary  09/19/19 3:32:11 PM Printer Friendly VersionPrinter Friendly Version

Thursday, September 19, 2019

Corn closed steady to a penny higher in a 4-cent trading range with trade volume deemed quiet. Funds were light sellers at mid-day and held an estimated short position of 119,000 contracts to start the morning. Most attention is on U.S. corn harvest with most activity taking place in the southern states, and KS through TN/KY. Heart of the Midwest won’t get going in earnest until October. 6-10, 8-14 forecasts call for A temps as does the latest NWS forecast for full October as well as the OND forecast model. The continued warmth is welcome to help a late crop to the finish line. One group still estimates there are 230 mln. bu. of corn at risk from chilly weather, but that’s down from 600 mln. bu. earlier. Weekly export sales came in at a solid 57.7 mln. bu., bringing YTD commitments to 341 mln. bu. (commitments are 16.6% of USDA projections vs. the 5-yr. average of 25.1%.) Buyer of note is Mexico, picking up 79% of weekly sales. They also account for 55% of total commitments to date. Yay Mexico! In the never too early to talk about next year category, Informa pegs 2020 corn acres at 95.1 mln. Some quick math shows 20/21 ending stocks at 3.4 bln. bu. That’s not bullish the board. President Trump meeting with Senators regarding ethanol issues.

Soybeans closed 3-4 cents higher in an 8-cent trading range. Volume deemed light and funds were even regarding daily activity at mid-day though they held an estimated short position of 79,000 contracts to start the day. There are still an estimated 3.8 mln. acres of beans in the U.S. that need to set pods. No one state has all the acres, but “northern” states that have work to do are SD, MI, and WI. Soybean harvest is seemingly 1-2 weeks late this year and we were 6% harvested at this time last year. It seems many areas in the Midwest expect producers to key on bean harvest before they switch to corn, thus pushing corn harvest back even further – will see how this storyline progresses. Weekly export sales were 63.5 mln. bu., bringing YTD commitments to 411 mln. bu. (commitments are 16.4% of USDA projections vs. the 5-yr. average of 24.2%.) Buyers of note were China, Mexico, and Egypt. No sales announcements to China today but they’ve sent a trade delegation to D.C. to set up the October negotiations. Chinese purchases seem tied to goodwill gestures and most likely need to be in the “MMT” category before the trade gets too enthused. Informa estimates 2020 bean acres at 84.2 mln. Quick math pencils 20/21 ending stocks at 740 mln. bu. Brazil is currently estimating 19/20 production at 123 MMT. It is dry in southern Brazil, but seasonal rains are still expected to start in early October, if they don’t, trade will pay attention quickly.
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