Gleadell Daily Grain Comment - 16 October 2017

[ADM Agriculture]

• US markets –soy higher on technical signs, strong Chinese import numbers and Brazilian weather concerns. Corn higher on solid US export number and Brazilian weather concerns. Wheat higher on late short covering from fund buyers.
• CFTC reports showed that a/o 10th October managed funds extended their Chicago wheat short by 11254 contracts (now seen 67729 contracts short), and trimmed long KCBT wheat position by 8625 contracts and long Minneapolis wheat position by 437 contracts.
• CFTC reports showed that a/o 10th October managed funds extended their Chicago corn short by 19739 contracts (now seen 162937 contracts short), and extended their long Chicago soybean position by 3234 contracts (now seen 30992 contracts long).
• US weather sees a majority of the US crop areas still likely to be dry biased Monday through to at least Thursday.
• South American weather sees the most significant change was some decrease of rainfall in central west/south of Brazil. Oct 23-24 GFS model also increases rainfall in NW Argentina, Southern Paraguay, and far Southern Brazil 24-26 Oct.
• Weather conditions are favouring the likelihood of the La Nina weather pattern, which can cause flooding and droughts during the Northern hemisphere autumn and winter.
• China estimates that the country’s corn consumption will increase dramatically in the year to Sept 30th 2018, mainly due the expansion of bio-ethanol production in China, helping to reduce the country’s corn stockpile.
• Ukrainian farmers have sown 5.7mln ha of winter grains so far, or 79% of the expected area. Grain exports have totalled 12mln t so far this year, including 7mln t of wheat, compared with 12.2mln t and 7.6mln t respectively a year earlier.
• Algeria’s grain output for the 2017 season reached 3.5mln t, slightly up from last season’s 3.4mln t.
• Morocco will cut customs duties for soft wheat imports to 30% from 135% from Dec 1st – the cut will ensure adequate supplies to the market, the government said.
• French farmers had harvested 28% of the year’s corn crop a/o Oct 9th, up from 15% last week, running slightly ahead of last year’s pace. Conditions remain favourable with 81% of the crop rated good or excellent, up from 53% y/y.

Last Trade Settlement:
London Nov ’17 Settle £139.80/t – down £0.60/t from previous close
Paris Dec ’17 Settle €162.00 – up €0.25/t from previous close
CBOT Dec ’17 Corn Settle $3.5275/bushel – up 3.75 cents/bushel from previous close
CBOT Dec ’17 Wheat Settle $4.3950/bushel – up 9.00 cents/bushel from previous close

Currency Today:
GBP EUR 1.1280
GBP USD 1.3300
EUR GBP 0.8865
EUR USD 1.1790