Authored by Dan Hueber via Hueber Report
The sun is once again shining brightly and while the resumption of harvest in a number of areas will be hit and miss, we know it is coming and markets have turned a bit softer in response. Progress last week was understandably muted but a little better than might have been anticipated from this vantage point in beans. We moved up 13% to 49% complete, which still leaves us 11% behind average.
The states that remain the furthest off pace:
- Nebraska at 33% (compared with the normal 67%),
- Minnesota with 45% done (versus 82%), and
- Iowa with 32% complete (compared with 66% on average).
It would appear that the extended forecast for the western Midwest is trending dryer but in the case of beans, these delays are certainly increasing concerns of increased field loss.
Corn harvest appears to have been rather limited as we only increased 6% to reach 28% complete and are 19% behind average. Last week we were 15% behind the average. Here as well the outlook appears conducive to picking up the pace and thankfully for those regions where maturity still lags, i.e., Wisconsin, No. Dakota and Michigan, the temperatures are forecast to remain above normal.
It was corns turn for export sales this morning. The USDA released sales of 115,000 MT to Mexico and another 146,000 MT to unknown destinations. Certainly nothing out of the ordinary but psychologically helps to keep them in the minds of the trade.
I see this morning that exports from Russia are on the decline but this is actually seasonal as they move into more challenging weather in the Black Sea. That said, at somewhere between 4.6 and 4.8 MMT of total grains, it will be a new record for that month, which continues a trend they have already set for the marketing year. For the period from July through current, they have exported 17.2 MMT of total grains compared with the prior year tally of 13.375 MMT. Recognize that this increased volume creates bigger competitive problems for the EU and Australia than it does directly for the US but it is increased competition nevertheless. Note that improved infrastructure was cited as one of the reasons that the Black Sea region is more competitive, which is a lesson that the United States fails to heed as our river system falls further and further into disrepair.
Yesterday I pointed out that strength that we have been experiencing in the crude oil market and it is worth noting that (understandably) we have been seeing a similar pattern in the commodity indexes. After stabbing in the low for the year in June, the tide has been slowly but surely rising. Granted, we will eventually need to push up and through the January highs to label this as a confirmed bull market but indicators and cycles are pointed in that direction and it would appear to be just a matter of time before all the boats begin to rise.
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