In the overnight session corn dropped another ¾ of a cent, soybeans fell 8 ¼ cents and wheat fell 4 ¼ cents as more selling pressure continues to weigh on the market. The U.S dollar is higher again this morning which will continue to weigh on commodities. This morning a sale of 59,309 tons of U.S corn was sold to Mexico for new crop delivery and 47,879 tonnes of corn was sold for 15/16 delivery.
China has delayed approving a GMO strain of soybeans, citing "low public acceptance". It is unclear which variety of soybeans has been delayed in approval but we will continue to monitor the Chinese GMO soybean situation. Corn was pressured last year after the Chinese rejected several shipments of MIR 162 corn developed by Syngenta. Several of these corn cargo shipments were loaded in Louisiana by Cargill, and last week it was announced that Cargill is suing Syngenta over the rejected shipments. This will be a land mark case for grain shipments as the legal system will have to determine if seed providers or grain merchandisers are liable for rejected export shipments.
Australian wheat production could fall to as little as 24 million tonnes from the current USDA estimate of 25.5 million tons after a lack of rains in the western region and spotty rain in its eastern growing region damaged the crops potential. Western Australia’s output could drop by 20 percent from a year ago according to CBH Group, Australia’s biggest exporter. The conditions in Australia have been for the most part factored into the market.
The next big reports for grain traders will be on September 30th, when the USDA releases their September 1st grain stocks report. This will have important implications for 2013/14 balance sheet as it indicates how much corn and soybeans remain in stocks at the end of the old crop marketing year. In a poll released by Reuters, traders expect the USDA to report September 1st corn stocks at 1.185 billion bushels and soybean stocks at just 126 million.
Today is the last trading day for short dated October options. Any options in-the-money at the close will be assigned futures positions. If you have questions about assignment or liquidation please contact our office.