USDA Releases Harvest Progress Estimates

Grains were lower in the night session, following Tuesday’s sharp rally in soybeans and wheat. In outside markets, the US Dollar, S&P futures and crude oil were all down in relatively quiet trade.

Soybeans led the charge higher on Tuesday gaining 26 cents, fueled by data showing strong export demand. China’s September trade data showed the best September in history for soybean imports, and it was also announced that China bought 240,000 MT of US soybeans. In addition, weekly export inspections announced on Tuesday were well above expectations with 1.8 MMT versus trade expectations of 1.1 to 1.2. Both corn and wheat had disappointing weeks for export inspections. Wheat came in at 290,000 MT versus trade estimates of 500-625,000 MT while corn was at 573,000 MT compared to 625-750,000 MT.

After the close on Tuesday, USDA released their harvest progress estimates. Both corn and soybeans were in line with market expectations as soybeans were 62% harvested versus 42% last week, and corn at 42% this week against 27% last week. Both corn and bean basis are holding up well in spite of the brisk harvest. US average corn basis has been up 1 cent going back to October 1, while soybeans are off only 1 cent over the same period. Basis levels are generally higher than this time last year thanks to sharply lower barge freight which has propped up river terminal bids.

Today, NOPA soy crush estimates will be released with expectations at 129.24 MB. If realized, that would be the busiest September for NOPA's member groups since 2007, when processors crushed 139.829 MB of soybeans. Soybean harvest progressed ahead of the typical pace during September, with reports of huge yields weighing on the market throughout the month.

U.S. stock futures showed little change early Wednesday, as investors avoided big bets ahead of a flurry of earnings reports and economic data. With the focus in the U.S. swinging back to quarterly earnings season, investors are becoming more cautious as expectations are for depressed third-quarter results for S&P 500 (ESZ5) components, especially in energy stocks.

Oil (GCLX5 / QMX5) eased further below $50 a barrel on Wednesday, falling for a third day on concern the supply glut will persist and demand will slow down as economic growth moderates in China. Chinese growth for the third quarter is expected to fall below 7 percent for the first time since the global financial crisis. The International Energy Agency (IEA) said on Tuesday the oil market would remain oversupplied in 2016.

—Cody Bills