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Wheat Wheat traded mixed with Chicago leading the exchanges, while Minneapolis only posted small gains and Kansas City lost some ground. Most of last week's support came from technical buying, as wheat has taken a hard beating the past month. Sep...

Ray Grabanski
Grabanski is president of Progressive Ag, a Fargo, N.D.-based hedge brokerage firm. Reach him at 800-450-1404.

Wheat

Wheat traded mixed with Chicago leading the exchanges, while Minneapolis only posted small gains and Kansas City lost some ground. Most of last week's support came from technical buying, as wheat has taken a hard beating the past month. September brought in a massive amount of pressure to wheat. For the week ending Oct. 2, December Minneapolis gained 2.25 cents, December Chicago picked up 8 cents and December Kansas City lost 2.25 cents.

Wheat started the week with gains, with buying spilling over from a strong corn and soybean complex. Additional support came from technical buying, as wheat has taken a hard beating the month of September. Position squaring ahead of the Sept. 30 quarterly grain stocks estimate and small grains summary report added support.

Selling returned to the wheat market to end the month of September. Wheat was pressured by bearish U.S. Department of Agriculture reports. USDA estimated all wheat production at 2.035 billion bushels, which was in line with expectations of 2.037 billion and slightly higher than the August estimate of 2.03 billion bushels.

The only negative estimate for production came in spring wheat, which was estimated at 600 million bushels, compared with the average trade estimate of 580 million bushels and the August estimate of 572 million. Higher-than-expected planted and harvested acreage (12 percent higher than 2013) was the main reason for the higher production. The other report, quarterly grain stocks, put wheat stocks at 1.914 billion bushels, compared with the average trade estimate of 1.88 billion bushels and 1.87 billion bushels for last year at this time. This will likely result in USDA reducing wheat demand in its October crop production report. To end the month of September, December Minneapolis wheat dropped 96.25 cents, December Chicago lost 85.75 cents and December Kansas City gave back 84.75 cents.

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The rest of the week brought in a mixed performance to wheat, but with most months picking up ground. Support came from a friendly USDA export sales estimate. Not that the estimate was stellar, it was enough for wheat exports to stay on pace to make USDA's projection. Light support also came from position squaring ahead of the Oct. 3 Statistics Canada production report. Wheat is still in a down trend, but very much in need of a corrective bounce. So far that is all this appears to be, but wheat has taken a strong enough hit that it could be looking for a bottom. Seasonally, wheat does stage a slight recovery around this time.

As of Sept. 28, 94 percent of the nation's spring wheat crop was harvested, compared with 86 percent the previous week and 96 percent for the five-year average. Winter wheat planting is estimated 43 percent completed, compared with 25 percent the previous week and 36 percent for the five-year average. Winter wheat emergence was estimated at 14 percent, compared with zero the previous week and 12 percent for the five-year average.

Corn

The corn market traded to new contract and five-year lows last week at, $3.1825 in December. Buying interest remains on the sidelines with private firms raising their production estimates for this year's crop and yield reports continue to exceed expectations. As of the morning of Oct. 3, the December contract was down 1 cent for the week, while the March contract lost 1 cent.

The corn futures were slightly higher on Sept. 29 as traders covered their short positions ahead of the Sept. 30 report and spillover support from the soybeans. USDA will release its quarterly grains stocks report on Oct. 7 and estimates for corn are 1.191 billion bushels. Traders expected the crop progress report to show the condition of the crop unchanged from the previous week, while harvest slightly behind the five-year average.

The corn futures traded to new contract lows on Sept. 30 and to levels last seen five years ago. Pressure came from the USDA report that showed stocks at 1.236 billion bushels and 45 million more than expected. The larger stocks number indicates demand was down last quarter and the recent strength in the dollar does not bode well for exports going forward.

The basis is also getting wider and took a big hit in Minneapolis. The crop conditions report left the corn crop unchanged for the fifth week in a row, while harvest is running behind the five-year average and will remain slow with widespread moisture. Trading was quiet on Oct. 1 and 2 and closed close to unchanged. Buying interest was limited with the weekly ethanol report that showed corn use down from the previous week and stocks were up. The bearish trend remains intact with large stocks, good yields and a strong dollar.

Ethanol production for the week ending Sept. 26 averaged 881,000 barrels per day, down 0.9 percent versus the previous week. Total ethanol production for the week was 6.167 million barrels. Corn used in production the week ending Sept. 26 is estimated at 92.51 million bushels and needs to average 98.534 million bushels per week to meet this crop year's USDA estimate of 5.125 billion bushels. Stocks were 18.828 million barrels, up 1.27 percent versus the previous week.

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The crop progress report has the corn rated at 74 percent good to excellent, 19 percent fair and 7 percent poor or very poor. Ratings were 55 percent, 29 percent and 16 percent, respectively, one year ago. Corn harvested is at 12 percent versus 11 percent one year ago and a five-year average of 23 percent. Corn dented is at 96 percent versus 95 percent one year ago and a five-year average of 97 percent. Corn that is mature is at 60 percent versus 60 percent one year ago and a five-year average of 70 percent.

Soybeans

As of the Oct. 3 close, November soybeans were 14.25 cents higher for the week and the January contract was up 14.25 cents. At 10 a.m. Oct. 3, November soybeans were trading 2.5 cents lower, while January was down 3 cents.

Soybean trade was higher Sept. 29 ahead of the Sept. 30 quarterly grain stocks report with expectations for Oct. 1 stocks of 130 million bushels, the same as USDA's estimate. Rain in the forecast was expected to slow harvest somewhat, though major issues were unlikely. Sept. 29 export inspections were good at 25.2 million bushels. The Sept. 29 crop progress report was expected to show steady conditions and maturity still slightly behind.

Soybeans started Sept. 30 lower, as selling resumed following the Sept. 29 bounce. Trade was waiting for USDA's quarterly stocks report with expectations for 130 million bushels of soybeans, but the reality was much lower at 92 million bushels. This was below the low end of expectations and the lowest number in more than 40 years. This was a bullish report and led to a bounce to trade higher, but the market slipped into the close to finish with solid losses on the day. The Sept. 29 crop progress report showed soybeans dropping leaves and harvested behind the five-year average, while good to excellent conditions improved by 1 percent from the previous week.

Soybeans started lower on Oct. 1 and 2, even setting a new contract low on Oct. 2, before rebounding both days to end with modest gains. The Sept. 30 bullish quarterly stocks report continued to provide support with 92 million bushels of ending stocks being the lowest number in 41 years. This also resulted in the lowest ending stocks-to-use ratio on record. Continued strong demand has been supportive with the Oct. 2 export sales report showing decent progress again and total sales up to 62 percent of USDA's total estimate for the marketing year. Despite the support, the trend in soybeans remains firmly down with expectations for a record crop.

Soybeans dropping leaves were at 69 percent, compared with 45 percent the previous week and the five-year average of 71 percent. Soybeans harvested were at 10 percent, compared with 3 percent the previous week and the five-year average of 17 percent. Conditions for soybeans were up 1 percent to 72 percent good to excellent, 22 percent fair and 6 percent poor or very poor.

Barley

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USDA's small grains summary and quarterly grain stocks estimate was friendly for barley. USDA estimated barley planted acreage at 2.975 million (16 percent less than 2013), harvested acreage at 2.458 million (19 percent less than 2013), yield at 73.4 bushels (up from 71.3 last year), and production at 180.4 million bushels (17 percent less than 2013). Stocks were estimated at 178.8 million bushels, 9 percent lower than 2013. Cash feed barley bids in Minneapolis increased 5 cents to $2.35, while malting bids increased 15 cents to $6.50.

Oct. 2 cash feed barley bids in Minneapolis were at $2.35 per bushel, while malting bids were $6.50.

Durum

As of Sept. 28, 78 percent of North Dakota's durum crop was harvested, compared with 55 percent the previous week and 88 percent for the five-year average.

Durum production was estimated at 57 million bushels, compared with the average trade estimate of 62 million bushels and the August estimate of 61 million bushels. This is friendly to durum and should help keep prices strong. Cash bids for milling quality durum were at $12 per bushel in Berthold, N.D., while the Dickinson, N.D., bid was at $13.

Canola

Canola futures on the Winnipeg, Manitoba, exchange closed the week ending Oct. 2 with $2.90 (Canadian) gains. Canola traded in a tight range last week, with most sessions only showing slightly more than $2 (Canadian) moves. Canola traded with gains to start and end the week. Strength spilled over from a stronger U.S. soybean complex, as well as from positioning ahead of the Oct. 3 Statistics Canada report (which is expected to show larger production). Production concerns kept a lid on the week's gains.

As of Sept. 28, North Dakota canola was 93 percent harvested, compared with 84 percent the previous week and 91 percent for the five-year average.

Oct. 2 cash canola bids in Velva, N.D., were at $15.71 per hundredweight.

Dry edible beans

As of Sept. 29, North Dakota's dry bean crop (40 percent of the nation's crop) was 47 percent harvested, compared with 29 percent the previous week and 54 percent for the five-year average. North Dakota's crop was rated 61 percent good to excellent, 30 percent fair and 9 percent poor or very poor, 2 percent less than the previous week. Minnesota's crop (7 percent of nation's crop) was 49 percent harvested, compared with 18 percent the previous week and 67 percent for the five-year average. Minnesota's crop was rated 52 percent good to excellent, 34 percent fair and 14 percent poor or very poor, 1 percent less than the previous week. Nebraska's crop (10 percent of nation's crop) was 64 percent harvested, compared with 41 percent the previous week and 67 percent for the five-year average. Nebraska's crop was rated 81 percent good to excellent, 15 percent fair and 4 percent poor or very poor, 2 percent less than the previous week. Michigan's crop (12 percent of the nation's crop) was 39 percent harvested, compared with 17 percent the previous week and 49 percent for the five-year average. Michigan's crop was rated 69 percent good to excellent, 25 percent fair and 6 percent poor or very poor, 1 percent lower than the previous week.

Sunflowers

As of Sept. 28, North Dakota's sunflower crop was 28 percent bracts turning brown, compared with zero the previous week and 49 percent for the five-year average. North Dakota's sunflower crop was rated 76 percent good to excellent, 19 percent fair and 5 percent poor, unchanged from the previous week.

Oct. 2 cash sunflower bids in Fargo, N.D., were at $17.35 per hundredweight.

Related Topics: CROPSMARKETS
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