Today’s Prices

Grain prices finished lower today with mixed news signals but crude oil down sharply today and there is concern that harvest pressure could push prices lower.

Grain Market News

Crude Oil

Prices are approaching the lows established a week ago at 81.20.

We are substantially below where we were at mid-summer at $123 per barrel and the high following Russia’s invasion at $130.

Todays price down around $85 per barrel is getting closer to the September prices from a year ago.

Unleaded Gasoline

Gasoline has fallen sharply as well, in fact from the highs posted back in June at 4.32 to the lows last week at 2.28 per gallon.

That’s over a $2 break in unleaded gasoline futures.

We are still trading at 2.42 per gallon, down nearly $2 from the summer highs.

Weekly US Gasoline Consumption

Gasoline consumption is consistently running below the year ago level in fact the last 4 weeks the average is down 9%.

So, a combination of lower gasoline consumption, sharply higher corn prices, sharply lower energy prices does throw us some red flags for the ethanol industry in the long term.

Replacement margins under the current environment are going to be very difficult.

Grain Market News

60-Day Precipitation % of Normal

From mid-July through mid-September is represented on the 60-day precipitation.

The areas in red, tan, and brown are areas without adequate moisture for filling.

Its primarily the western belt and the plains while areas in green or blue should be sitting in good shape including most of the eastern belt, Ohio valley, down into the delta.

Vegetation Health

Compared to last year we are dryer to the west and in the plains, with much better vegetation health in the eastern belt an, northern belt, and down into the delta.

U.S. Dollar Index

A lower U.S. dollar index promotes better exports because our products are more competitive on the global market

A higher U.S. dollar index means that our prices are more expensive to foreign buyers.

The dollar index recently has pushed over 110, that it the highest level going back 20 years to 2002.

U.S. exports are going to be less competitive or less affordable to many world buyers.

World Soybean Basis

This chart compares the soybean basis in the US Gulf and the Paranagua of Brazil.

September soybeans are just a fraction cheaper than Brazil and in November Brazilian beans slightly below US beans.

Typically, the U.S. is much cheaper and gains most export sales this time of year heading into US harvest.

December Corn Chart

Corn prices are in an uptrend, but over the last 2.5 days we have seen the market turn lower which has turned the technical lower as well.

Currently the chart and technical are indicating that this market could push down towards chart support in the 6.60-6.65 range.

That’s 12-17 cents below where we are currently trading.

November Soybean Chart

Soybean prices have also turned down over the lats couple of days which was enough to hook the technical lower as well.

From a chart perspective the next level of chart support would be where our moving averages are coming into play around the 14.30 level.

Further chart support down around 14.10 where we have our uptrend.

December KC Wheat Chart

Wheat prices had a key reversal down today.

We made a new high for the move at 9.58 earlier this morning and then the market reversed and closed lower.

One item pushing wheat lower is an idea that a rail strike would have promoted stronger wheat feeding in the southwestern plains and with the rail strike appearing to be avoided that is going to maybe lower the potential for wheat feeding and wheat prices turn lower in a key reversal today.

Next level of chart support comes in around the $9 level.

Questions or Comments

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