OK, parts Texas received a bit of a soaking over the weekend, as the remnants of Hurricane Patricia hit.
Some areas of the state received 20 inches of rainfall, according to Commodity Weather Group.
But extreme soakings were confined to the east of the state.
In fact, many areas of the southern Plains hard red winter wheatarea, where moisture is needed, besides the Midwest too, where newly-seeded soft red winter wheat could do with a drink, went without much moisture.
And, while it looks like Midwest states such as Illinois should receive rains by the middle of the week “improving moisture in time to establish soft red wheat”, CWG said, that is not so certain for the southern Plains.
While parts of the southern Plains should receive rains by next weekend, helping crops in northern Oklahoma and southern Kansas, the “north eastern one-third of Kansas wheat could still get missed, hampering crop vigour going into the winter”.
‘Vulnerable to winterkill’
“US futures are likely to wax and wane as forecasts of this rain event evolve,” said Tobin Gorey at Commonwealth Bank of Australia.
In fact, December soft red winter wheat futures stood up 1.6% at $4.98 ¼ a bushel in Chicago as of 09:15 UK time (04:15 Chicago time), climbing above a clutch of moving averages – the 10-day, 40-day and 50-day lines.
The contract also touched the psychologically-important $5.00-a-bushel mark earlier, only to retreat again.
Hedge funds sell-down
The forecast for the former Soviet Union was somewhat supportive too, despite the weekend bringing some “beneficial” rain to southern Russia, where again moisture is needed to bolster establishment of autumn-seeded wheat.
“Colder trends in the next week limit late growth,” said CWG, adding that southern Russian wheat will “only have a week to take advantage of the moisture boost”.
Meanwhile in Ukraine, “dry areas persist” in the western half of the country, and “with a cold push this week, crop will go dormant poorly established and vulnerable to winterkill”.
And, as an extra potential support for prices, US regulatory data late on Friday showed hedge funds making their biggest weekly sell-down on record for Chicago wheat futures and options, by more than 35,000 contracts.
That suggests that much bearish ammunition for the market has already been used.
Weather is an issue for soybeans too, of course, in terms mainly of the dryness which has plagued many central areas of Brazil, notably top producing state Mato Grosso, so slowing plantings of the oilseed.
According to AgRural, Brazilian soybean sowings are 20% complete, behind the 30% average by now (if ahead of the 16% a year ago, which was also a dry spell).
Still, that situation should improve, with weather service MDA saying that “showers should favour Goias, Minas Gerais, Sao Paulo, Mato Grosso, Mato Grosso do Sul, Parana, Santa Catarina, and Rio Grande do Sul this week.
“Amounts should be 0.25-1.25 inches, locally 3.5 inches, with 90% coverage.”
‘Weather leans bearish’
“Weather leans bearish” for prices, with “centre west Brazil rains still on track,” said Richard Feltes at Chicago broker RJ O’Brien, also noting the strong results from the US harvest.
RJ O’Brien intelligence suggested that Iowa corn yields were “trailing off during the latter half of the harvest, while soybean returns help up well”.
January soybean futures, the best-traded contract, fell by 0.5% to $8.91 ½ a bushel in Chicago, just staying above their 40-day and 50-day moving averages.
‘Basis is rebounding’
Corn itself felt some support from the idea of a late easing in US harvest yield results, besides by farmers’ reluctance to sell what they had, at least at prices much below $4 a bushel, a factor which is supporting US cash prices.
“Corn basis is rebounding, with the producer a much tighter holder of corn than soy during harvest,” Mr Feltes said, although proposing that the “next bushels to be sold will be corn”.
There has been some idea that the end of harvest, in taking many farmers beyond the limits of their storage capability, will see a flourish of selling.
The market also has some negatives from China to factor in, with talk of an investigation into imports of distillers’ grains (DDGs), the corn-derived feed ingredient, and of Beijing limiting corn which can be sold into state reserves.
This would likely increase domestic use of corn, and limit imports (including of DDGs).
Still, with the end of the US harvest also typically a supportive time for prices, and prices of rival grain wheat higher, December corn futures gained 0.3% to $3.80 ¾ a bushel.
It was also some help for prices that the Argentine elections did not show a clear winner, meaning a rerun on November 22, and so maintaining uncertainty being blamed by some observers for slow sowings of corn (with some farmers waiting to see if a strict export tax regime will be lifted).
However, in New York, cotton was not so positive, easing 0.3% to 62.55 cents a pound for December delivery, amid initial ideas of relatively low damage from weekend rains in the southern Plains.
The path of the storms “is thought to have been through fields that have already been harvested”, said CBA’s Tobin Gorey.
“While quality remains an ongoing concern, the event is unlikely to have impacted overall production too dramatically,” although a weekly report late from the US Department of Agriculture will shed more light on the situation.
Also a weight on prices was the drier tone to the southern Plains weather outlook, although reports from the actual harvest (elsewhere) are mixed.
At the Rose Report, Louis Rose flagged talk of “higher-than-expected” yields in Missouri, “some upwards of 1500 pounds an acre in extreme south east Missouri”.
Southern Alabama yields are also holding up, but Arkansas and Louisiana results not so.