Higher Start Expected with Modest Grains Support from Outside Markets
A mostly higher start is expected this morning, roughly 5-10 beans, 3-5 corn and $1-2 meal. Wheat and oil could start either way so I will call them mixed for now.
Crude oil is lower this morning but equities are up while the $ is lower, overall a modestly supportive background picture for the grains.
The USDA Supply/Demand Report this morning was bullish corn and beans, bearish wheat. Wheat ending stocks were estimated at 712 million bushels with corn 1.740 billion bushels and beans 185 million. Oil ending stocks were guessed at 2.778 billion lbs with meal estimated at 300,000 short tons. The USDA increased its estimate of corn used to make ethanol from 3.6 billion bushels to 3.7 billion for the 2008-09 crop year. They sharply cut their guess on the amount of bean oil used to make biodiesel fuel from 2.9 billion lbs to 2.2 billion, although this was more or less expected. It takes 1 bushel of corn to make 2.8 gallons of ethanol and 7.5 lbs of bean oil to produce 1 gallon of biodiesel fuel. In the 2007-08 crop year, which starts October 1 for oil and September 1 for corn, we used 2.981 billion lbs of bean oil for biodiesel fuel and 3.026 billion bushels of corn for ethanol.
The only changes of note in the world production estimates by the USDA today were a cut in Argentine bean production from 43.8 to 43 million tonnes and an increase in South African corn production from 10.5 to 12 million tonnes. Despite these only minor changes, the USDA upped world wheat ending stocks for 2008-09 to 155.85 million tonnes from 149.96 million last month and world ending corn stocks to 144.6 million tonnes from 136.7 million last month. World ending bean stocks were increased very slightly, 49.95 million tonnes vs 49.87 million last month. World meal stocks were unchanged at 5.25 million tonnes but world oilstocks jumped to 2.66 million tonnes from 2.41 million last month.
Talks between the Argentine government and farmers unions didn't make much progress yesterday, according to the unions, but more talks are scheduled for next week.
Wheat deliveries totaled 180, corn 637 and oil 1500. There were still no bean deliveries and no meal either.
Argentina will remain mostly dry today through Sunday with scattered, welcome rain possible Monday. Brazil had up to 1.5" of unwanted rain in the northern half of the bean belt the last 24 hours, delaying bean and corn harvesting. Rain is forecast the next 2-3 days in the south with dry weather following for several days. More unwelcome rain is predicted in the north the next 3-5 days, further slowing harvesting. More welcome rain is forecast for China's winter wheat belt the next two days.
The southwest US winter wheat belt will benefit from moderate to heavy rain in the east and central parts of the belt the next 3 days with light but still very welcome amounts in the west during this time, followed by a mostly dry weekend. The 6-10 day predicts above normal temps and below normal rain.--VIc Lespinasse
Crude oil is lower this morning but equities are up while the $ is lower, overall a modestly supportive background picture for the grains.
The USDA Supply/Demand Report this morning was bullish corn and beans, bearish wheat. Wheat ending stocks were estimated at 712 million bushels with corn 1.740 billion bushels and beans 185 million. Oil ending stocks were guessed at 2.778 billion lbs with meal estimated at 300,000 short tons. The USDA increased its estimate of corn used to make ethanol from 3.6 billion bushels to 3.7 billion for the 2008-09 crop year. They sharply cut their guess on the amount of bean oil used to make biodiesel fuel from 2.9 billion lbs to 2.2 billion, although this was more or less expected. It takes 1 bushel of corn to make 2.8 gallons of ethanol and 7.5 lbs of bean oil to produce 1 gallon of biodiesel fuel. In the 2007-08 crop year, which starts October 1 for oil and September 1 for corn, we used 2.981 billion lbs of bean oil for biodiesel fuel and 3.026 billion bushels of corn for ethanol.
The only changes of note in the world production estimates by the USDA today were a cut in Argentine bean production from 43.8 to 43 million tonnes and an increase in South African corn production from 10.5 to 12 million tonnes. Despite these only minor changes, the USDA upped world wheat ending stocks for 2008-09 to 155.85 million tonnes from 149.96 million last month and world ending corn stocks to 144.6 million tonnes from 136.7 million last month. World ending bean stocks were increased very slightly, 49.95 million tonnes vs 49.87 million last month. World meal stocks were unchanged at 5.25 million tonnes but world oilstocks jumped to 2.66 million tonnes from 2.41 million last month.
Talks between the Argentine government and farmers unions didn't make much progress yesterday, according to the unions, but more talks are scheduled for next week.
Wheat deliveries totaled 180, corn 637 and oil 1500. There were still no bean deliveries and no meal either.
Argentina will remain mostly dry today through Sunday with scattered, welcome rain possible Monday. Brazil had up to 1.5" of unwanted rain in the northern half of the bean belt the last 24 hours, delaying bean and corn harvesting. Rain is forecast the next 2-3 days in the south with dry weather following for several days. More unwelcome rain is predicted in the north the next 3-5 days, further slowing harvesting. More welcome rain is forecast for China's winter wheat belt the next two days.
The southwest US winter wheat belt will benefit from moderate to heavy rain in the east and central parts of the belt the next 3 days with light but still very welcome amounts in the west during this time, followed by a mostly dry weekend. The 6-10 day predicts above normal temps and below normal rain.--VIc Lespinasse
posted by InsightPublishing at
8:29 AM
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