Grains are lower at midday:
Dec Corn - 5 cents/bu (5.22 ¼ )
Nov Soybeans – 18 ¼ cents/bu (12.65 ¾ )
Dec Chi Wheat – 9 ¼ cents/bu (6.99 ½ )
Cdn $ -0.00550 (77.895 cents)
WTI Crude Oil -1.50/barrel (70.47)
Grains continue to be under pressure today, however, weakness seems to have more due to outside influences than actual new market news. Commodities and equities are all lower (except for precious metals), as the market digests the fact that the 2nd biggest real estate developer in China, which happens to also be one of the 50 biggest companies in the world, appears to be in financial distress. The fact that a big Chinese conglomerate is in trouble is raising questions about the status of the Chinese economy in general, which automatically raises questions about their demand for commodities. That is why soybeans have been the weakest of the grains this morning. Equity weakness is a little alarming, with Dow futures currently down 720 points (33,741) and Nasdaq futures down 383 points (14.943)
This morning, there were no USDA Flash Export Sales announcements from the government.
The concern over China’s economy has allowed precious metals and the US dollar to rally in price today, as investors look for secure assets. The strength of the US dollar means that our Loonie has tumbled in value, so despite grain futures being weaker, Wanstead Farmer Co-op basis bids have actually improved for most delivery windows.
USDA Weekly Export Inspections for the week ended Thursday, September 16th were within the range of expectations, and were a little better than we have seen in earlier September. That would be expected, given that a portion of USA Gulf terminal capacity is back on line. Of note in today’s weekly report, 140,000 tonnes of corn was loaded out of the Gulf for China, and one cargo of wheat and one cargo of beans were loaded for China out of the Pacific Northwest.
After the close today, we will get the USDA Weekly Crop Condition Report, with the trade hoping to see updated harvest progress numbers.