Headline risk from the outside markets trickled into money flow in commodities through today’s trade. Here’s how things shook out and a few important headlines.
December Corn futures higher as corn harvest advances 21%.
Live Cattle continues trading higher.
StoneX Increases Estimates for US Corn and Soybean Production
By Tarso Veloso and Michael Hirtzer
(Bloomberg) — US corn production is estimated at 15.222 billion bushels, up from 15.127 billion last month, StoneX says Tuesday.
- US corn yield raised to 184 bu/acre from 182.9: StoneX
- Change comes after the USDA’s Sept. 12 increase to 183.6 bu/acre
- StoneX estimates US soybean production at 4.613 billion bushels with a yield of 53.5 bu/acre
- Those compare to last month’s estimates of 4.575 billion and 53 bu/acre
Delayed Russian Planting May Put Wheat at Risk for Frost Damage
(Bloomberg) — Limited rains are seen over Russia and the Black Sea region, further delaying already slow winter grain planting and increasing the risk of crops being damaged by frost later in the year, according to weather forecasters.
- Over 75% of wheat growing areas in Russia saw little to no measurable precipitation last month: Tom Whittaker, meteorologist at Aura Commodities
- While more rains are forecast toward the end of October, a colder than normal November could become a bigger problem
- A pattern of dry autumn, limited snow cover and then frost-kill seen in 2020, where harvest expectations fell, could materialize
- “For now, current conditions putRussia at greater risk of above normal winter-kill damage, until we see snow forecast later this year”: Whittaker
- While northwestern Russia will see some rainfall in the next ten days, central and southern Russia will remain very dry: Donald Keeney, meteorologist at Maxar Technologies
- “This will result in lower planted area, and the wheat that has been planted will be poorly established and have weaker roots. Thus, it will be more susceptible to freeze damage this winter during any cold outbreaks”: Keeney
- Maxar’s winter outlook trends warmer with no significant prolonged freeze events currently expected
Barge Rates
According to the USDA, barge rates downriver are at their highest level since September of last year. As the Mississippi waters recede, barge companies such as American Commercial Barge Line are reducing the weight of vessels and making shipment even more expensive.
Those logistical issues are happening right at the end of the year, when transportation costs typically rise because of the greater demand to move recently harvested crops. This year’s supply-chain complications threaten to push costs even higher, further reducing the competitiveness for American exports in comparison with Brazil and Argentina.
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