Closing Market Comments September 23, 2022

Today’s Prices

Grain markets finished lower today on the advancing soybean and corn harvest but more of the pressure came from severe losses in the outside markets.

Weekly Price Summary

Grain Market News

DOW Jones

This market has collapsed recently from 34,200 in Aust down to 29,298 today.

This is the lowest DOW Jones average in nearly 2 years.

These new lows posted by the DOW Jones certainly have investors very concerned and liquidation spilled over into the grain.

Crude Oil

This market went from highs following the Ukraine invasion at a $130 a barrel to today down to $78 per barrel as the market collapsed.

This may be good for fuel purchases, but this is not good news for the biofuel industries.

As energy prices fall biofuel producers can pay less for the raw material which would be corn and soybean oil.

Overall declining energy markets are negative for the grain market.

U.S. Dollar Index

This determines the cost of U.S. goods to foreign buyers.

As the U.S. dollar index goes higher it makes our product more expensive on the world market and therefore a higher dollar can hurt our U.S. exports.

The U.S. dollar has exploded to the upside up to nearly $113, that compares to just $89 a year and a half ago.

This is the highest U.S. dollar in over 20 years.

Mortgage Rates

The fed raised interest rates by ¾ of a percent in this week’s report.

The fed is expected to raise interest rates further in future reports.

U.S. 30-year interest rates have over doubled from below 3% last year at this time to above 6% this week.

Today’s outside market was very negative and certainly spilled over into the grain.

Grain Market News

High Temperatures

Finally, we are seeing a break in the heat that we have been seeing for an extended period of time.

The cold front has pushed all the way down to the gulf coast leaving most of the US central corn and bean belt much cooler.

As this boundary pushed off to the south and east, rain showers will push off to the south and east as well.

7-Day Observed Precipitation

As the cold front works its way to the south, we did get some good rains in Nebraska and Kansas along with last weekend in southern Iowa into central Illinois.

Other areas like South Dakota, northern Iowa, southern Minnesota were mostly missed as well as most of the delta being missed, and harvest should be rapidly advancing to the north.

7-Day Precipitation Forecast

The forecast shows the light rains wrapping up in the central belt today, they’ll wrap up in the eastern belt tomorrow, and then we will get into a warming trend again along with dryer conditions as well.

Temperature Outlook

Dryer developments in the forecast shows up very nicely in the 6-10 day with warming temperatures in the central and west.

That extends into the entire corn and bean belt in the 8-14 day.

Precipitation looks very dry in the 6-10 day and remains dry in the 8-14 day.

Grain Market News

December Corn Chart

The corn market has been very choppy in a sideways range the last couple of weeks, although we are near the upper end of the range.

The market has rallied to 6.99 on the bullish USDA September crop report a week ago Monday and then the market rallied this week on the Russia/Ukraine development.

Today’s prices down sharply, we actually closed below the 20-day moving average.

This is the first time we have closed below that average since early August.

Todays big down move pushes prices close to the upward trending line, that line needs to hold or we could see the market start eyeing up the next level of chart support which would be in the 6.36-6.42 range.

November Soybean Chart

Soybean prices had bullish news almost 2 weeks ago from the September crop report pushed up to $15.

Today prices are sharply lower, and soybeans closed below all the moving averages.

This makes it a negative development from a price perspective and turned our technical indicators lower as well.

December KC Wheat Chart

Th wheat chart looks a little bit better although today was disappointing.

Today’s lower prices and the technical indicators turning down from overbought levels does tell us we could have some additional downside risks into the 9.20 range.

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