Closing Market Comments August 26, 2021

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Today’s Prices

Grain prices quite and mixed today, not a lot of fresh news to push prices too far away from unchanged.

Grain Market News

Corn: Weekly Export Sales

U.S. sales have been very slow beginning in about April as two things happened. South American crops became available and U.S. prices surged well over $7 and that allowed our exports to slow significantly which was necessary to prevent stocks becoming too tight. The good news is that some of the massive exports we’ve had from last fall and then 7.4 mmt in January and 4.4 mmt in March. The vast majority of those sales have been shipped or are being shipped even though new sales have been very slow.

Soybeans: Weekly Export Sales

A similar scenario in our weekly export sales for soybeans. Since March soybean export sales have been very slow. Prices were very high. We went over $16/bu in May and South America, specifically Brazil, was able to produce a record large soybean crop. The good news is that the huge sales that were being made back in Sep and Oct last fall have been shipped and almost all of the old crop business has been moved out already.

Grain Market News

U.S. Corn Ending Stocks

After 6 years of adequate to even surplus levels of U.S. corn stocks, this current crop year that will end next week, at 1.117 just 1.117 bb of corn stocks. That’s extremely tight. Next year projected to be very tight as well. In fact, just a small increase in demand or a small reduction in this year’s crop could leave next year’s stocks even tighter than the current crop year.

U.S. Soybean Ending Stocks

U.S. soybean ending stocks extremely tight as well, getting down towards the tightness we saw in the 2012 drought. Here again, any increase in demand or small reduction in yield or production could cause soybean stocks to become record tight.

U.S. Wheat Ending Stocks

Wheat stocks had been declining for 4 years and this year’s stocks another sharp decline and wheat stocks expected to be exceptionally tight this year, going the party with tight corn and beans.

U.S. Grain Stocks

After building stocks after the 2012 drought to adequate levels and then 4 additional years of surplus, ending stocks of U.S. grain dramatically lower this current year and next year could be even lower. That is likely to result in relatively high prices for a 2nd consecutive year.

Major Corn Exports STU

This chart shows major exports stocks to use ratios. Stocks globally way down and stocks to use in the orange line is going to be record low, even below the stocks to use level following the 2012 drought. It’s worth noting that this extreme tightness is feed grains and corn is not just in the U.S. but it’s a globally shortage as well.

7-Day Observed Precipitation

We’ve mentioned that rains have been improving the soil moisture situation in the northwestern belt and we’ve had very good rain in many locations just over the last week. We do want to note there are still dry pockets. One dry pocket in the eastern belt, one in the western Plains, and some smaller pockets in MO and SD but the dry areas have been shrinking but our markets this week have been stable to even higher. Showing that weather is losing its impact and the markets are now focusing more on crop size and the potential for extremely tight stocks next year.

7-Day Precipitation Forecast

The 7-day forecast continues to show heavy rains, 1-3” across the northwestern belt with 3-5” in southern MN, northern IA, and into western WI. Another feature to watch is the tropical storm, possibly a hurricane, landing on the U.S. Gulf Coast shores next week either late Sunday night or Monday. This will need to be monitored closely as it could put down 5-7” of rain in the very productive Delta region in the southern U.S. and they’re just ramping up with their harvest at this time.

December Corn Chart

Corn prices have a short-term uptrend developing. We’ve come right up to our moving averages, the 10, 20, and 40 day all converging and that is where the market rallied to yesterday and again today. But the chart still looks good and the technicals look pretty good as well. The chart and technicals are hinting that we could have some additional upside potential in the December corn contract.

November Soybean Chart

Soybean prices also have turned to a short-term uptrend and the technicals are pointed up as well. Today’s setback may cause the very short-term uptrend to take a pause, but it still looks as though the chart has some upside potential and technicals as well.

September KC Wheat Chart

Wheat prices had a good day, break out to the upside as high as $7.17 in today’s trade. That’s enough to start turning the technicals. Wheat is starting to look better from a chart and technical perspective.

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