Closing Market Comments September 16, 2021

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Today’s Prices

Grain prices finished mixed today as the markets are consolidating following 2-3 days of solid gains.

Grain Market News

U.S. Corn Harvest: Average Pace

This week, as of Sept 12th, harvest progress is fairly close to average at 5% but that will be accelerating. Normally we’d be about 64% down by the end of Oct. This year we could be 75-80% down by the end of October.

U.S. Soybean Harvest: Average Pace

USDA did not report soybean harvest this past week. Next week when it comes in we should be sitting just below 10%. Maybe 6-8% complete in next week’s initial soybean harvest report. By the end of Oct soybeans are typically about down with harvest and this year should be no exception if the forecast is correct.

Grain Market News

NOPA Soybean Crush

This chart shows the NOPA soybean crush and for Aug it was up slightly from last month but still well below the previous 3 years. Soybean margins are very good. The slow crush is likely due to the fact there are not many beans left in the old crop position and we need to wait for the new crop supplies to come in before we see crush ramp up significantly.

World Soybean Basis

In addition to soybean crush ramping up with new crop harvest, U.S. soybean exports should be ramping up significantly as well. This chart shows the soybean basis. The U.S. soybeans were the highest price from late last year through early August this year. Brazil basis in red has exploded to the upside over the last month and a half and is well above the U.S. Argentina in green and also exploding to the upside. U.S. soybean prices not only the cheapest in the new crop position but they’re also the cheapest offer in the world for nearby position. This is good news for seeing exports increase in the weeks and months to come. This data is courtesy of the AgResource Company.

U.S. Vegetation Health Change

The vegetation health index showing the change from last week shows rains in the northwestern belt have allowed crop conditions to improve recently while the eastern belt and the southern belt down into the Delta generally seeing conditions decline. This week has been relatively dry and we expect crop conditions to be steady or slightly lower in next week’s update from USDA.

7-Day Observed Precipitation

Rains in the northwestern belt over the past 7 days should allow crop conditions to stabilize there while the central, southern, and much of the eastern belt has been relatively dry over the last week again. We believe this will contribute to slightly lower crop condition ratings.

7-Day Precipitation Forecast

There is some rain in the forecast. One system comes through the northwestern belt primarily late tonight and tomorrow and then some rain early next week in the belt as well. None of these rains look like they’ll be threatening to U.S. crops or present any significant delays. Just minor delays for a day or so when these rains take place. Temperatures are expected to remain above normal so we look at the forecast as being mostly favorable for the advancement of harvest.

6-10 and 8-14 Day Forecast

Warm temperatures for most of the central U.S. means there is really no frost in the forecast for the next 2 weeks. And frost does not appear to be a significant event as even the long term maps are hinting at no frost into early October.

December Corn Chart

Corn prices posted a new high for the move today. That was good news. We did turn around and closed a little bit lower. So a little bit of something for everyone but overall the chart does look good. We’ve broken above our downtrend line very cleanly. That’s a supportive feature. We’re above the 10-day moving average which is starting to turn upward. Overall, this market looks pretty good from a chart perspective with the next level of overhead resistance up in the $5.50 with the technicals also looking pretty good. We’re not expecting the market to run away to the upside as harvest is ramping up but chart and technical signals do look pretty good and that is drawing in some additional speculative and fund buying.

November Soybean Chart

Soybean prices also showing signs of wanting to move higher. Today’s high at $13.08 took out the high from last Friday when we had a key reversal. That adds another piece of information that could be supporting the idea that last Friday’s low, prior to the key reversal up was a significant seasonal low and the charts certainly looking better with the technicals looking better. The next level of overhead resistance would be up around $13.40. Those highs were posted about 2 weeks ago.

December KC Wheat Chart

Wheat prices continue to be impressive not only making a new high for the move at $7.22 but taking out the downtrend line, 10-day, 20-day, and 40-day moving averages and closing strong today. The wheat market appears it could be the leader from a chart and technical perspective and there is plenty of room to move on the technical indicators as well.

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