Prices opened higher across the board on crop progress numbers. Markets may be oversold and due for a bounce. Ratings were a bit of a surprise, under trade expectations and friendly for the market. This report runs contrary to bearish comments from the Pro Farmer crop tour. There continues to be rumors that China is around the bean and the corn market on recent weakness. US corn and beans are the cheapest. US wheat remains at a premium to other global origins. Global wheat offers continue to rise.
Export inspections were good for wheat, but low end for corn and beans. Bean exports are now at 2.163 bln bu vs. USDA at 2.260 bln bu, with one cargo out of the Gulf to China, and a few other exports to traditional customers such as Mexico. Year-to-date corn inspections total 65,101 mmt with just a few weeks left to go in the marketing year. Wheat marketing year to date shipments were 5.663 mmt vs. 6.232 mmt yr ago.
WEATHER – Forecasts are for normal to above normal temperatures for the majority of the US with scattered rainfall amounts. Best rains are going to be in the Dakotas and the upper Midwest, with the eastern cornbelt needing that last finishing rain. Five day maps show good rain potential for Wisconsin and Minn.
Global: More talk of La Nina for the southern hemisphere with the NOAA increasing chances to 70%. Rains are picking up in Canada, but it is too little too late.
REPORTS
Crop progress
beans: 56% good/excellent, down 1%. States with the largest declines were Illinois, (down 4%), Kansas (down 4%), Mo., (Down 4%), and North Carolina, (down 4%). Improvements were noted in Iowa and Minn. Blooming: 97% vs. 94% wk ago. Setting pods: 88% vs. 81% wk ago. Dropping leaves: 3%
corn: 60% good/excellent, down 2%. Dented: 41%. Dough stage: 85% vs. 86% yr ago. Mature: 4% vs. 5% yr ago. Illinois was down 7% and Wisconsin down 5%.
Spring wheat: Harvest is 77% vs. 58% wk ago and 46% yr ago.
Crop progress net impact is positive.
ANNOUNCEMENTS
Brazil’s gov. reported that bean exports through the third week of August averaged 332.9 tmt/day vs. 278 tmt /day yr ago.
Russia’s Ag Ministry forecast that as of August 23, they have harvested 622 mmt of wheat with an average yield at 3.13 mt/hectare.
Calls are as follows:
beans: 13-15 higher
meal: 1.50-2.00 higher
soyoil; 80-90 higher
corn: 2-3 higher
wheat: 3-5 lower
Outside markets include higher crude at $66/barrel and a firmer US dollar at 93.06. Traders will watch Fed comments coming out of Jackson Hole Wyoming, thinking that the resurgence of the Delta variant may actually create a halt to tapering. Stocks are up 77 pts. in early trade.
Tech talk: November bean prices trade back over $13.00 on the back of lower crop ratings. The range was adjusted lower on the back of Pro Farmer comments, but may need to stabilize around $13.00 before seeking another direction. While the chart does speak to price stability, the overall trading range now appears to be temporarily from $12.75-$13.20. Pullbacks may see support, but open interest increased this week speaking to new shorts in the market. Good rallies may continue to attract selling interest as the market accommodates bulls and bears. The December meal chart was an interesting trade as prices fell to the downside once again at $350.00, but continues to hold on to trading range lows. Despite overnight steadiness, the chart is still vulnerable to a further break. December soyoil futures break to 5660c and over the 100 day moving average of 58c. Look for the chart to now establish a trading range from 57c to 62c. Soyoil held true to form with a good bounce from 5650c on oversold chart signals.
The December corn chart recovered trades from lows just under $5.30 this week. Daily support still is close by at $5.25 to $5.27 should we go there. Lower crop ratings may see the Dec corn prices on a consolidation trade from 5.30 to 5.50. December wheat consolidates sideways from $7.25 – $7.60. The chart is not negative, and funds may be looking for places to get long. Hard to be short until sell-stops get triggered, which may only happen if $7.22 is violated with a close underneath.
DECEMBER CORN: The market remains in a sideways to lower chop pattern, after building in a line of resistance which was from $5.82 to $5.63. Key resistance moves down to $5.66, and the $5.50 -$5.55 level which was key support is now lowered resistance as the market attempts to find a solid landing. Probes just under $5.30 leaves direction open to further slow price erosion, with an eventual target low of $5.15 should we go there. The 20 and 100 day moving cross at $5.55, and that becomes a very strong resistance level as well. Would look for the possibility of price consolidation, but the market remains soft and further lows at $5.25 / $5.27 may be the next level to hit given the seasonal tendency to head lower with funds still having a net long. Think we head into a $5.25 – $5.55 trading range, but $5.25 will have to prove it can hold. The ADX is at a weak 13, meaning there is not much of a trend here, but prices are not oversold at this point.
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