Highlights
A surprise for the day is water levels on the Lower Mississippi are actually higher than they were last week. Somebody must have opened some gates up stream last week.
La Niña will take a break. Both the 6 to 10 day and the 8 to 14 day weather forecasts predict above to much above normal rainfall from Indiana all the way to the West Coast. Consistent decent rainfall for two weeks will slow the last of the harvest, which will firm the basis and support futures prices.
And get barges moving more efficiently, on the rivers which will:
Increase the export pace, which will firm the basis
Lower barge freight rates, which will firm the basis
Give the hard red winter wheat crop a chance to survive the winter
However, La Niña will cause more extreme weather in 30 to 60 days as the water temperature began a decided down trend several weeks ago, which means dry weather will return to the Midwest in 30 to 45 days. Note the ENSO chart:
To Learn All About ENSO, La Niña, El Niño, go to:
Tidbits
The national average corn basis turned positive this week. That usually does not happen until June. Of the five strongest basis years, the corn basis turned positive in late April. Bullish.
Cargill Sidney soybean crush plant basis firmed 5 cents this week, Cargill’s crush plant in Iowa Falls basis firmed 30 cents this week and is even with November futures.
The Rosario Grain Exchange reduced its estimate of Argentina’s wheat crop for the third consecutive week. This week, down 1.3 million mt to 13.7 million. That is 40% less than last year. La Niña at work.
Romania’s Ag Minister says 2022 sunflower seed harvest totaled 2 million mt, 800,000 mt less (28.5%) than last year. La Niña at work.
About 30% of the Eastern Australian wheat crop is expected to be impacted by recent heavy rains of as much as 8 inches (200 mm) the past two weeks. Milling quality has been lost on two to three million mts of wheat and flooding has done widespread damage. Agronomists and farmers say the 30% estimate is a low balling the damage. La Niña at work.
Planting pace of soybeans in Brazil's state of Parana is slower than it has been in 8 years and 12% behind average due to wet weather. La Niña at work.
But in Mato Grosso, Brazil’s largest bean and corn producing state, soybeans were 67% planted as of Friday, nearly even with last year's fast pace. However, a drier pattern in early November is predicted by the GFS model. Brazil's Center West crop area has been dry enough that bean planting has been delayed and that reduces the potential size of the safrinha corn crop.
Refinitiv estimates Brazilian soybean production at 151.3 million mt (USDA 152).
From a year ago, the harvest price of corn is up 28% and the bean price is up 12%.
The Bank of Canada raised interest rates by 50 basis points (½%) yesterday. The market expected a 75 basis point increase.
The Energy Information Administration (EIA) reported the US crude oil inventory increased 2.6 million barrels for the week ending October 21 after a drawdown of 1.7 million barrels the previous week. None-the-less, crude oil futures were smartly higher yesterday due to the weak dollar.
The new British Prime Minister, Rishi Sunak, said he would reinstate a ban on fracking in England.
Broilers & Ethanol Update
Last week:
Broiler egg set was up slightly than the same week a year ago.
Broiler egg hatch was up 6% than the same week a year ago.
Average daily ethanol production:
1,033,000 barrels last week.
1,016,000 barrels the previous week.
1,106,000 barrels the same week a year ago.
941,000 barrels the same week two years ago.
Ethanol inventory was 22.291 million barrels compared to 21.844 million barrels the previous week.
Market Update
This morning:
Crude oil is at $87.81, down $0.10
The dollar index is at 109.78, up 0.08
December palm oil is at 4,126 MYR, up 57. The contract high was made April, 29th at 6,384 MYR. Palm oil owns 36% and soybean oil owns 28% world market share.
December cotton is at $77.61, down $0.21 per cwt. The contract high was made May, 17th at $133.79 per cwt. Cotton competes with soybeans and corn for acres.
December natural gas is at $6.143, up 0.024. The contract high was made August, 23rd at $10.119. Natural gas is the primary cost to manufacture nitrogen fertilizer.
December ULSD is at $3.6720 per gallon, down 0.0046. The contract high was made June, 17th at $4.0719. ULSD stands for Ultra Low Sulfur Diesel.
December Dow Futures is at 31,978, up 106. The lifetime high is 36,832 on January 5th, 2022.
Rain Days Update
The 6 to 10 day forecast updated every day at: https://www.cpc.ncep.noaa.gov/products/predictions/610day/
Explanation of Rain Days