Grain prices firmed marginally over the past week, adding to the gains that were made after the surprising USDA stocks report from September 30. Traders are still focused on the trade war and the weather, which will influence final yields.

 

High-level trade negotiations are going on now, but expectations for an agreement are dwindling. Some think the impeachment rhetoric will impede the process as China may take more of a wait and see approach. As if this hasn’t gone on long enough already!

 

US corn is 58% mature as of October 6. Normally it is 85% by this date. Less than 40% is mature in the Northern Plains. Frost and snow are likely there this coming weekend. This will affect the quality and quantity.

 

Generally, yield reports in the US are more below expectations in soybeans than in corn. Both will be below the past two years. This coincides with the weekly crop condition reports which showed good and excellent crop ratings well below normal all year.

 

Much of Ontario has an open window for soybean harvest this week, which will give everyone a better handle on yield. Variability, depending on rainfall, will be extreme. Most corn is still far from maturity. The corn looks vom-free, which is a blessing, but test weights could affect grades.

 

USDA will release its monthly demand/supply and carry out estimates on October 10. Another shocker shouldn’t surprise anyone. Apparently, they will also update the prevent plant acres, adding even more uncertainty.

 

The Canadian dollar remains rangebound. So far in 2019, it has been confined to a 3 cent range. Local basis levels are higher than normal, however, following the lead from the US. Central Illinois corn harvest basis is at its best level in 5 years.

Bond markets remain firm, as economic growth nearly everywhere in the world is slowing. Trump is blaming the Federal Reserve for the US slowdown, as the US interest rates are amongst the highest in the developed world.

 

This is keeping the US dollar firm. Plus, the US dollar is still considered the safe-haven currency in the world when there’s fear or uncertainty. Proof of this was in 2008. The US banking crisis caused the worldwide recession, but the US dollar still rallied sharply.

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