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Today’s Prices
Grain prices finished lower today with the outside markets the primary feature. The Stock Market down 950 points this afternoon.
Grain Market News
Bloomberg Commodity Index
You can see the gap lower on the Bloomberg Commodity Index chart. Again, most of the selling spilling over from weakness in the financial and equity market. The good news is that the long-term trend is still an uptrend but today’s move certainly a big move and a gap down in commodities in general.
US, Europe, China Stocks: Pct Change
Stock markets had been trending higher. This is an index showing U.S., European, and Chinese stocks starting at Jan 2019, the zero point, and then gauging stock market increases. The U.S. S&P up about 80% since Jan 2019. China’s Shanghai market up about 50% from just under 2 years ago. And the Euro Stock Industry up 40% from less than 2 years ago. Whether the Evergrande scenario is just a correction in an overall long-term uptrend or if it is a sign of bigger underlining problems in China will be seen over the next few weeks, maybe the next few months.
Grain Market News
Corn: Weekly Export Inspections
Three weeks into the marketing year, this week’s corn export inspections were a nice improve at 15.8 mb but still well below the level needed to reach USDA’s export forecast. We need about 50 mb/week. Two items worth noting, the Gulf had been shut and is gradually starting up and also new crop harvest still needs to crank into a higher gear to make more corn available for the export market. There is also a seasonal factor. Typically, our soybean exports are the strong in Oct-Dec with exports of corn ramping up in the late spring and early summer. Year to date exports after just 3 weeks are down 69.8% from a year ago. USDA is projecting exports will be down 10%. We believe that exports when the year is over could be fairly close to last year’s total.
Soybean: Weekly Export Inspections
A small increase in soybean exports up to 10 mb but still only a quarter of the level needed to reach USDA’s export target at 42 mb. U.S. exports of beans are typically relatively slow in September and then really ramping up in Oct-Jan. Exports this year even slower than normal due to the Gulf being shut down and due to the fact that old stocks are virtually depleted. USDA is projecting U.S. exports will be down 7.5% this year. Because of the slow start, after 3 weeks we’re down 86% but that should catch up fairly quickly over the next 2-3 months.
Wheat: Weekly Export Inspections
The wheat crop year began June 1st. This week’s export inspections at 20.7 mb. Above the level needed to reach USDA’s export forecast and after the first 4 months of the marketing year, year to date export on wheat are down 11%. USDA is projecting exports will be down 11.8% so we’re running very close to USDA’s target.
High Temperatures
U.S. weather shows warm to even hot temperatures over the vast majority of the belt. Yesterday’s high was in the 90’s in many areas, all the way up into MN and SD. These temperatures are 15-20 degrees above normal for this time of year. The combination of very warm temperatures, even hot temperatures, combined with strong southerly wind yesterday really drying down U.S. corn and bean crops quickly. That is good news for harvest progress but that rapid dry down may not be so good for maximizing corn and soybean weight.
7-Day Observed Precipitation
In addition to temperatures being in the upper 80’s and low 90’s, we’ve also had no precipitation right through the heart of the belt over the last week. And we do believe crop conditions nationwide are likely to slip lower in this afternoon’s update from USDA.
7-Day Precipitation Forecast
Rains will wrap up today in the northern belt. No rain expected in the western belt or Plains over the next 7 days. Most of the rain in the eastern belt will wrap up over the next 24-48 hours while the eastern belt will also turn dry beginning late Wednesday.
6-10 and 8-14 Day Forecast
The 2-week outlook shows temperatures warming up in the west in the 6-10 day and the entire corn and bean belt warm in the 8-14 day. We also have a dry trend for the entire central U.S. in the 6-10 and the 8-14 day. Overall, this looks like very good news for advancing harvest even if may not allow crops to maximize weight in the areas that have missed out on recent rains.
December Corn Chart
Corn price broke through chart support last week on Thursday but since then we’ve had a pullback. The breakout above the downtrend line likely does indicate the harvest lows were set a week ago Friday, the day of the Sept crop report. But the outside markets and concerns regarding China saw the markets experiencing a significant correction again today. For the moment Dec corn has support down around the $5 level and overhead resistance at $5.37, last week’s high.
November Soybean Chart
Soybean prices were trending gradually higher through last week on Thursday but then last Friday and today the market setback. Today sharply lower on the negative news coming out of China. The negative news was not soybean related. It was more related to their real estate or property industry as concerns about the general health of their economy. Nonetheless, soybeans testing the lows that were established a week ago Friday, the day of the crop report. That is chart support. And just above $13 is current overhead resistance. We’ve been in this range for almost 3 weeks now.
December KC Wheat Chart
Wheat has also had a correction Friday and today but the overall downtrend was broken. Last week with prices trading above the downtrend line also trading above all of the trading moving averages. Wheat could have some additional downside corrective action but $6.70 certainly looks like it was a seasonal low for wheat.
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