Travel necessitates another evening comment but I should be back on the regular schedule next week.
We are still a couple sessions away from the August crop production report but the trade has already slipped into report mode where the only action appears to be stimulated but position squaring in front of the numbers. Wheat should be the market with the least potential impact from the reports but a surprise in either corn or beans could have a big impact on this market as well.
The situation with Russia remains tense at best as they have now banned imports of a number of western products including meats, fish, cheeses, vegetables and milk. I have not seen where the US or others have tried to retaliate at this point but it would appear to me that the only loser in this situation is the Russia consumer who will likely be paying more for the food that they consume.
While still better than the 10-week average, wheat sales dropped 26% this week to 590,900 MT or 21.7 million bushels. The best buyers were Nigeria at 222,400 MT, Taiwan for 85,300 MT and Mexico for 68,300 MT. The Black Sea continues to dominate the world market and with the recent trouble, the Russian Ruble continues to sink making them all the more competitive in the world trade.
It would appear that for now, we have a waiting game until the reports on the 12th. The average trade estimate for all wheat is slightly higher than the July estimate at 2.01billion bushels. The most interesting number may be to see what the USDA does with the Russian crop. On the last report they projected a 53 MMT crop and some in the trade now believe this could be in the 60 to 62 MMT range.
Relatively lifeless trade in the corn market as we count the hours down to the USDA report. Each weather update appears to confirm cooler than average temperature through much of the balance of August with a few showers every now and then thrown in for good measure. Hardly the kind of news that would scare too many bears away.
Exports sales were disappointing especially in face of the depressed values as we posted the lowest weekly number since mid June for old crop and the lowest number in three weeks for the new. 2013/14 sales registered 120,900 MT or 4.8 million bushels. This does carry us to 19 million bushels above the USDA target but as pointed out earlier this week, it would appear that part of these will be pushed into the next marketing year. The 2014/15 sales were 758,700 MT or 29.9 million bushels which is still above the 10-week average of 18.8 million but down 30% from last week. The best purchasers were Columbia at 237,000 MT, Mexico at 186,200 MT and unknown destinations at 108,200 MT.
The current trade estimates for next weeks report has an average yield of 170.2 b/p/a and production of 14.25 billion. The Hueber report issued our estimate today with a yield of 169.5 b/p/a and total production of 14.208 billion.
November beans could not sustain the early strength yesterday and ultimately finished a touch softer for the day. Prices have struggled in the early evening trade and it would appear this market has slipped into pre-report mode as well.
There were no surprises in the export sales numbers but both old and new crop were towards the bottom of the trade expectations. For the 13/14 crop year we posted another 94,900 MT or 3.5 million bushels which would appear to be a moot point at this time. We will see a fair amount of the remaining sales on the books rolled into the new crop. For the 14/15 sales we did book 1.008 MT or 37.1 million bushels and while by no means shabby, very much expected.
With weather forecasts continuing to remain favorable, the last best chance for the bean market would appear to be a positive number on the estimates next week. Seeing that the trade is expecting a boost in production, it would appear we could remain susceptible to positive surprises if prices do not mover higher between now and Tuesday. The current trade estimate calls for a yield of 45.5 b/p/a and production of 3.815 billion. The Hueber Report is looking for the USDA to leave numbers unchanged at 45.2 b/p/a with production at 3.8 billion bushels.
Never discount the potential for a surprise but it would appear that it should be difficult for the bean market to hold support in the current range for much longer. The bulls have been waiting for reinforcements but they may never arrive.