Hurricane Season Part II
Sep 08, 2017
Market Watch with Alan Brugler
September 8, 2017
Hurricane Season Part II
Last weekend the talk was about Hurricane Harvey, and damage to the cotton crop and export/rail facilities in south Texas, with a nod to potential storm damage as Harvey moved into AR and eventually the Ohio River Valley. This week, there is a lot more hurricane talk with 3 of them active at the same time. Katia is pretty much being ignored on the east coast of Mexico, but Irma is going to hit Florida on Sunday and Georgia soon afterward. That changes the commodity discussion, with a lot more soybeans, peanuts and other crops mixed in with the cotton in Georgia. GA also will combine beans as late as November, so there is more in the field. Rain from Irma is expected to work its way up into IN and OH eventually. Let’s not forget Hurricane Jose, a big Cat 4 storm hanging out in the Atlantic. That one isn’t currently projected to threaten the US mainland, but stay tuned!
Corn futures finished 4 ¼ cents higher on the week. Corn conditions ratings saw the Brugler500 index drop 4 points for the week to 357. Conditions are still slightly better than the long term average for this date, suggesting yields near trend but down from the record level of 2016. The USDA reported 1.48 MMT of new crop corn export sales during the week of August 31. Full year exports through August 31 totaled 56.520 MMT (2.225 billion bushels). Analysts are starting to revise their crop estimates ahead of the September USDA reports. Per Reuters, the trade average estimate for US corn yield is 168.2 bpa for this report, with production at 14.035 billion bushels. USDA was at 14.153 billion in August. The CFTC Commitment of Traders report on Friday showed spec funds adding another 44,748 contracts to their net short position in the week ending September 5. That put them net short 109,723 contracts and the most bearish since June 6.
Wheat futures continue to see shifts in the inter-market spreads. KC HRW was up for the second week in a row, by 0.73%. Chicago SRW retreated 1.6%, while MPLS spring wheat was up 3% after losing 5.9% the previous week. Stats Canada wheat stocks were larger than expected at 26.8 MMT, and US wheat exports continue to be hindered by hurricanes and hurricane damage. New crop sales for the week ending August 31 were 375,500 MT. SovEcon also raised its Russian production estimate to more than 81…