Today’s Prices
Corn and soybean prices finished lower today as the market did not receive any fresh bullish news and we are seeing somewhat of a correction as we head into harvest.
Grain Market News
Soil Moisture and Vegetation South America
You can see southern Brazil and approaching central Brazil is in good shape with soil moisture, dryness is present in portions of central northeastern portions of Brazil.
Argentina’s growing area is suffering through some drought, right now the biggest concern is for Argentina’s wheat crop as they are just going to be getting started with planting.
Vegetation health index shows Brazil’s primary growing region in southern and central Brazil have health better than a year ago while its lower in far northern and northwestern growing regions.
In Argentina you can see that vegetation health is much below a year ago in the southern, southwestern areas but ok in the north and northeast.
Grain Market News
30-Day Precipitation % of Normal
The tan, brown, and red areas are the areas that likely don’t have enough moisture for adequate filling at this time.
Many areas in the plains as well as a portion of central USA corn and bean belt could likely use an additional rain.
There are also areas sitting in goo shape like central Iowa, northeast Iowa, northern Illinois, southern Wisconsin, southeast Minnesota, and much of the eastern belt into the Ohio valley.
Calculated Soil Moisture
The darkest red or maroon are where soil conditions are 1% lowest on record and you can see again it’s the plains and the western belt where soil conditions are awfully dry as we try to fill out the corn and soybean crop.
Southern portions of the eastern belt into the Ohio valley look to be in good shape along with northern Illinois, Wisconsin, and then Minnesota and Iowa.
Grain Market News
Weekly Ethanol Production
Production did drop from last week down to 963 thousand barrels per day, that’s still above last year at this time but slightly below the level needed.
We do expect as new crop corn becomes available that ethanol production will expand into late October-December going forward.
Weekly Stocks of Fuel Ethanol
Our stocks of fuel ethanol declined, so that’s good news.
This is the second week in a row our stocks of fuel ethanol declined from the previous week.
We are still at relatively high levels when it comes to stocks of fuel ethanol.
December Corn Chart
Corn prices pushed right up against the $7 level Monday following the crop report and then again on Tuesday morning.
But since then, prices have started to slip lower as the market has likely factored in most of this bullish news that the USDA provided.
Now the market needs some addental or fresh bullish news to keep the rally going.
We are clearly in an uptrend, but this market certainly has the potential to pull back towards chart support down in the 6.60 level.
Technical indicators are overbought, and the break today did turn the technical indicators lower.
November Soybean Chart
Soybean prices also peaking yesterday morning at 15.08, but since then they turned lower.
In fact, todays close at 14.55 is already 53 cents below yesterday’s high and enough to give the technical indicators a little bit of a hook.
This market needs to find fresh bullish news and quickly to prevent a further break down.
Chart support currently at 14.20.14.25 range.
December KC Wheat Chart
The December chart like the September chart continues to show signs of U shape bottom and we do believe $10 is possible into Fall.
If corn and beans have a break, we can’t rule out wheat pulling back towards chart support.
That may open the door for 40-50 cents of downside risk if we don’t get fresh bullish news.
If we did pull back that could still leave the overall chart in somewhat of a U shape bottoming pattern.
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