HIGHLIGHTS

·         Market Trend—Corn, Up 1-2; Soybeans, 7-8 Higher; Wheat, 4-5 Higher   

·         The potential for political gridlock in Washington to shut down the government seems to be the top market maker this morning.  The debt ceiling is likely to hit come October 1, raising fears that if Congress doesn’t raise the limit, bills won’t get paid.  Adding to market nervousness are conflicting messages of late from the Fed regarding cessation of the stimulus.  Most Asian markets closed lower; Europe is starting off weaker and U.S. futures indicators are all in the red:  Dow, down 22 with both the S&P and Nasdaq, 3 ¼ lower.  Safe-haven gold is up $7/oz higher; energies are firmer and the $ Index is a 1/5 of a point lower at 80.475

·         T-Storm continues with a mostly dry and mild weather outlook into the early weekend for the Central U.S.  At that point, scattered .4”-.8” showers are expected but mostly in the Western Corn Belt.  He is at odds with the GFS model which is forecasting multiple storm clusters developing during the October 3-6time-frame and instead, is calling for several days of dry weather once the weekend passes.   Argentina looks unseasonably cool the next 7-10 days, stifling wheat development and rain is becoming increasingly needed.  Key areas of Center-West Brazil look favorable for rains Sunday through Tuesday

·         Dec Corn Up $.02 at $4.5075; Mar Corn Up $.0175 at $4.6325.  The funds sold 4 K yesterday 

·         Nov Soybeans Up $.07 at $13.1950; Jan SB Up $.0750 at $13.2225.  Funds:  bought 1 K SB, 2 K SBM and sold 1 K SBO

·         Dec Wheat Up $.05 at $6.6325; Mar Wheat Up $.0475 at $6.7325.  Funds bought 4 K Tuesday

CORN/SORGHUM

·         Trade continues to be surprised by the inflow of good yield reports

·         Export demand?  Long-time top U.S. customer Japan YTD purchase total at only 78 mbu, a 25-year low/15% below LY

·         Estimated weekly ethanol grind to start the new crop year is up close to 2.2 mbu per week (2.5%), favorable margins

·         USDA expects feed grain feed/residual use to rise by 13% in 13/14, more corn along with less barley and wheat use

SOYBEANS/WHEAT

·         Soybean export sales at an all-time seasonal high, up 7% over 2012 to 841 mbu on aggressive Chinese buying

·         Spot cash crush margins remain profitable, above $1.25 West and exceeding $1.50/bushel in the Central Belt

·         Initial samples from the Canadian wheat harvest indicate lower than average protein levels, ranging from 12.5% in NE Saskatchewan to a high of 13.4% in SW Manitoba

·         India’s summer food grain output expected to rise 1.1 MMT to a record 129.2 million—more acres/good monsoon

·         Unshipped U.S. wheat sales up 41% over 2012 on demand from China/Brazil, supporting near-term exports

ENERGY

·         EIA estimates (API):   crude oil stx, down 900 K (-100); gasoline, down 100 K (+300); distillates, down 300 K (+500)

·         Energy markets are firmer: QCLX13,  +$.61 to $103.75; QRBX, +0.0289; QNGX, +$.032 and QHOX, +$.0323

·         Spot ethanol markets were lower Tuesday, led by an 8 ½ cent decline for Chicago values.  NY and Tampa fell 7 ¾ to 8 cents; LA was off 6 ¾ with the Gulf and Dallas losing 3 and 4 ½ cents, respectively

·         RINs: 2012’s were indicated 51-55 ½, off 1 ¼; 2013’s were off 1 ½ to 552-56; 2014’s were down 1, 53-57

·         The November RBOB/ethanol spread pushed out from $.9140 to $1.0039 on improved corn supply prospects

LIVESTOCK/POULTRY                   &n​bsp;                       &nb​sp;               

· &n​bsp;       Choice boxed beef values firmed 22-cents yesterday and have increased $1.38 over the last two days

·         Cash cattle markets are quiet with feedlots asking $126 while packers bid $123.  Cattle traded LW at mostly $124

·         The USDA pork carcass cutout value eased 49-cents yesterday and has lost 58-cents over the last two days

·         The USDA’s Iowa/Minnesota average cash lean hog price gained $1.83 yesterday to $93.75

Sources: Bloomberg, Dow Jones, AP, T-storm Weather