By Kirk Maltais
--Corn for December delivery fell 1.3% to $4.84 a bushel, on the Chicago Board of Trade on Tuesday, with this year's U.S. harvest appearing to keep up with its normal pace.
--Wheat for December delivery fell 1.2% to $5.80 1/2 a bushel.
--Soybeans for November delivery rose 0.7% to $12.95 1/4 a bushel.
HIGHLIGHTS
Staying on Track: The U.S. corn and soybean harvests are largely on track with normal seasonal rates - putting pressure on corn futures in particular. In its Crop Progress report yesterday, the USDA said the corn harvest is 59% complete, on par with this time last year and ahead of the prior 4-year average of 54%. The soybean harvest is 76% complete, behind the 78% pace this time last year but ahead of the 67% average 4-year pace. The progression of the harvest typically pressures grain futures at this time of year unless there's a disruption to its usual progression.
Weather Watching: Fresh rainfall in Australia and South America pressured CBOT wheat, as key wheat-growing regions received timely rain. In Australia, the rain may not reverse damage already seen in the country. "The latest period of drought is still likely to have taken its toll," said Commerzbank. "This is because the crop, even at these higher forecasts, would still fall more than 10 million tons short of the crop in the 2022/23 season." Rainfall in Argentina is also seen as impacting wheat there.
Wheeling and Dealing: Soybeans got a lift from a set of purchasing agreements signed between Chinese agricultural companies and U.S. commodity exporters at a ceremony organized by the U.S. Soybean Export Council and a number of other trade groups, which was held in Des Moines, Iowa. Archer Daniels Midland signed agreements with three different Chinese companies, with other major U.S. suppliers like Bunge, CHS, and Cargill also making agreements with Chinese companies like Sinograin Oils, according to the USSEC-- which has representatives of ADM and Cargill on its Board of Directors. Traders and analysts now anticipate when these purchases will be announced by the USDA.
INSIGHT
Heavy Duty: Heavy rains and snows seen in the U.S. Plains and Midwest this week didn't move the needle for the grain market, signaling that trader attention is now firmly on South America and few questions remain about the U.S. crop. Even though analysts say anecdotal evidence from harvesting farmers is a mixed bag yieldwise, there's little concern that any slowdown in harvesting this week will knock U.S. grain supplies off course. "The trade won't see an issue long-term, and seems content with current USDA supply estimates," said Matt Zeller of StoneX in a note.
Cutting Into Profit Margin: Agriculture giant ADM reported a lower 3Q profit following a broad decline in crop prices this past year after the commodity shipper benefited from their historically high levels in 2022. Russia's invasion of Ukraine sent crop prices soaring a year ago, helping grain traders and processors such as ADM. Prices have come back down after better weather in South and North America led to improved crops in Brazil and the U.S. ADM said its North America trading revenue was also hurt in the quarter as exports from the region declined. The company reported a 3Q profit of $821 million, down from $1.03 billion a year ago.
AHEAD
--The EIA will release its weekly ethanol production and stocks report at 10:30 a.m. ET Wednesday.
--The USDA will release its monthly Cold Storage report at 3 p.m. ET Wednesday.
--The USDA will release its weekly export sales report at 8:30 a.m. ET Thursday.
Patrick Thomas contributed to this article.
Write to Kirk Maltais at kirk.maltais@wsj.com
(END) Dow Jones Newswires
10-24-23 1539ET
