Closing Market Comments September 9, 2021

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Today’s Prices

Grain prices finished mostly lower today as the market has a very bearish attitude and there has been a lot of liquidation ahead of tomorrow’s September crop report.

Grain Market News

U.S. Yield and Production

U.S. Ending Stocks

World Ending Stocks

Grain Market News

CRP Acres

CRP acres were reported at 20.8 mil acres. That is down 1.1 mil acres from last year so that added to our acreage and then USDA believes they have made some enhancements to the CRP program that will encourage additional enrollment. Right now enrollment is 4-5 mil acres below the cap established in the 2018 Farm Bill and USDA is stating they would like to see CRP acres move closer to the cap in the acres to come. And therefore, after the lowest acres this year we think acres may start to increase beginning next year.

Prevented Plant Acres: Corn, Beans, and Wheat

Also the maximum acres is due to the prevented plant acres. This year’s prevented plant at 1.266 mil acres for corn, beans, and wheat is the second lowest of the recorded numbers. Only lower by the drought year of 2012. With very small and near record lower prevented plant that means the maximum number of acres did get planted to crop area.

Corn, Beans, Wheat Combined Planted Acreage

This chart shows the combined planted acres for corn, beans, and wheat and allows us to see how the acreage that USDA uses in its crop reports can change throughout a season. This year USDA was using a total planted of 225 mil acres in the baseline report. They bumped that up in the outlook forum but then came back down to 225 mil in the prospective plant and May crop report. But in June USDA raised acres sharply up to 229.7 mil acres. Now, instead of waiting until October USDA has stated they will update acreage in tomorrow’s September crop report. Some view the fact that 229 mil acres could rise close to the 2014-15 year which was close to 233 mil acres. But we want our viewers to understand that urban sprawl takes away at least 0.5 mil acres per year and over 7 years that would take away 3.5 mil acres. We believe the 229.7 mil acres is somewhat of a maximum number of acres available for planting. We are not expecting any major increases in acres. We could see corn, beans, or wheat tweaked by 300-500K acres each in either direction.

U.S. Temperatures

Weather is becoming less significant and following a cold front, temperatures this morning in the 40’s in the northwestern belt. That is now where close to being freeze or damaging and temperatures are expected to begin warming up from year. We see no frost threat over the next two weeks.

U.S. Radar

There is also virtually no precipitation in the U.S. corn and bean belt. In fact, most of the U.S. dry at midday today with the exception of the far eastern U.S. Overall the forecast looks warmer and drier than normal. There will be some rains that are expected next week but generally conditions look quite favorable for harvest. Although that may be seen as a negative as it will allow harvest to ramp up. Given the fact that U.S. stocks of corn and beans are already depleted. We can’t start to see a demand increase until we start to see new crop bushels coming to town. We’re hoping we have a quick start to the harvest season so we can get the demand train rolling down the tracks.

December Corn Chart

Heading into tomorrow’s crop report prices are near the spring and summer lows that were close to the $5 level. Technical indicators are as oversold as they’ve been in over a year. Certainly this market is beared up and bracing for negative news tomorrow.

November Soybean Chart

A similar scenario where prices are getting down close to the summer and spring lows. Technical indicators are oversold. In fact, as oversold as we’ve seen them over the last year. And here again, the trade is bracing for a bearish report tomorrow.

December KC Wheat Chart

Wheat prices are down making a new low for this move today which is negative on the chart but they’re not near the summer lows given the fact we have major losses of Canadian and Russian wheat this summer. That is allowing wheat prices, despite a sharp break, to still be well above, in fact about a $1 above the spring and summer lows.

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