Weather problems are now thought to be factored into market prices. Grain supplies are adequate for short term demand. Export demand is driving the markets in feed and fiber. Ocean freight prices are increasing with oil prices making U. S. exports more expensive.
The United States will be the key supplier of soybean exports until the next South American harvest. Soybean prices find support from increased export demand. USDA export projections were increased 20 million bushels. Export inspections totaled 59.5 million bushels. China remains the largest buyer.
Palm oil supplies are tightening and that is soybean bullish. China has imported 41 million tons this crop year.
Corn quality problems are shifting demand to soy meal. Chickens on feed are still down 2 percent, but that is compared to 5 percent earlier in the year. Cattle on feed are up 5 percent four months in a row. That is fundamentally bullish for grain demand
Soybeans ending stock estimates were bearishly increased 95 percent at 270 million bushels. World ending stock estimates were increase 35 percent to 57.5 million tons. Yields are turning out slightly less than predicted. Export sales remain above average. Soybean crush was above expectations at 155 million bushels.
Quality problems are becoming a market factor for corn. The crop is only 54 percent harvested and most of that has high moisture. Diseases affecting feed use have been found in some corn. Test weights are lower than expected. Low quality corn is best suited for ethanol production.
Buyers are concentrating on soybeans and ignoring corn in the short term. Export inspections were disappointing at 22 million bushels. Total inspections for the year are 4.5 percent behind average. Export sales are lagging behind predictions.
Mexico bought 210,000 tons of U.S. corn last week. Farmer selling increases at $4. Wet infected corn is more difficult to place in storage. Chinese production is below average.
Wheat prices continue to follow the relative dollar value as compared to other currencies. Lower dollars increase exports but higher dollars decrease demand. The market sentiment is that investor commodity buying is overdone. Wheat pricing is due for correction.
Planting is near normal for winter wheat. The crop condition ratings remain above average. El Niño is causing drought in the southern hemisphere and rain in the northern.
Export sales barely met expectations. Some market analysts believe wheat prices are due for correction. India intends to increase wheat acres substantially next season. Export inspections were 15 million bushels. That is bearishly near the lower end of market expectations. Fundamentally world supplies exceed demand.
World rice demand has increased. A typhoon in the Philippines has ruined much of their rice crop. India has so much damage to their rice crop that they are now expected to import 1 million to 3 million tons of rice this year. The next Vietnam harvest will provide increased rice exports. Rice stored in Thailand is estimated at 6 million tons but they are not offering it for sale.
Export sales and vessel loadings are increased. USDA has reduced yield projections by 77 pounds per acre. Ending stock estimates are therefore 2.4 million hundredweight lower than previous estimates at 44.2 million. Latin American demand is expected to increase. If the government allows sales to Cuba prices will increase.
Cotton harvest is putting pressure on prices despite the fact that supplies are declining worldwide. Cotton markets are overbought in light of current demand. U.S. apparel imports are down 2.4 billion dollars for this market year. Cotton retail sales have increased 1.5 percent from last month. Cotton stocks registered for delivery were up to 457,851 bales.
Cotton prices continue to trade in a narrow range following world stock market pricing. India has cotton available for the Chinese market. Indian cotton is usually lower priced than U. S. cotton. That market factor is compounded by geographic proximity which allows lower freight cost for shipments from India to China.
Cotton fundamentals of supply and demand are turning more bullish as world supplies diminish. Export sales remain disappointing. Potential cotton production numbers continue to fall. Brazil has a smaller than anticipated cotton crop.