Today’s Prices
Grain markets finished mostly higher today with outside markets providing support again for the second day in a row.
Grain Market News
Corn Crop Conditions
Corn crop conditions have been 52% good to excellent for the last 3 weeks and over the last 21 years there has only been 3 years that had a lower rating.
This certainly helps to explain why traders are expecting the U.S. yield to come in below trend line.
Corn- Change in G/E
There were several states that seen improvements but the major states like Iowa down 3, Illinois unchanged, Nebraska down 3, and Minnesota down 1.
So, 3 of the top 4 producing states in the nation were down and that offset the minor state increases like Kentucky, Colorado, and Pennsylvania.
USDA Corn Yield Estimate
The trend line yield for this year is 181, trend line increases by about 2 bushels per acre each year.
The late planting had USDA drop the corn yield to 177 and then the heat and dryness dropped the yield to 175.6 in August and 172.5 in September.
We wouldn’t be surprised to see the average trade guesses dropping a little more in the October crop report based on the extreme dryness in many areas through late August and September.
We would not be surprised to see the average trade guess coming in around 171.5 ahead of USDA’s crop report.
U.S. Corn Yield
USDA currently projecting yield at 172.5, so clearly below the trend line yield but with crop conditions at just 52% good to excellent that makes sense.
Soybean Crop Conditions
The soybean rating has held steady at 55% good to excellent the last 3 weeks, that is below last year’s rating of 58% and also hinting at a yield below trend line.
Soybeans- Change in G/E
This week we can see that several states saw significant increases but most of them relatively small states like Kentucky, Michigan, Arkansas, and Mississippi
The major states like Illinois up 1 but and Iowa down 1, Minnesota steady, but declines in South Dakota, Kansas, and Nebraska.
Overall declining states offset the improving states and the national rating held steady at 55%.
USDA Soybean Yield Estimate
USDA started the year with a trend line of 51.5 bushels per acre.
They raised the yield, which was a surprise in the August report, that was not expected but then USDA lowered the yield significantly in September.
The average trade guess has not yet been released but it appears most traders feel that 50 or something just above 50 is likely to be the average.
U.S. Soybean Yield
Over the past 56 years you can see that 50.5 is just 1 bushel below the long-term trend line yield of 51.5.
Grain Market News
Soil Moisture Anomaly
We can see a large area of the central U.S. corn and bean belt and all the plains is well below normal.
This area does feed the Mississippi River so therefore that is a major contributor towards the low water level, even the eastern belt which is in good shape is not experiencing any surplus soil moisture.
Not only is the lack of soil moisture a concern for the Mississippi River its also a concern for that final filling stage on any late crop that could still benefit from soil moisture.
U.S. Rivers in Flood Stage
There are no rivers in the entire central U.S. that are at flood stage.
The rivers that are at flood stage are from hurricane Ian which pushed through Florida and up the east coast.
We do have rivers in flood stage there but that does not affect U.S. crops for the most part and it also does not affect the Mississippi River.
Mississippi River
Flood stage is 30 feet, and we are sitting at -1, its expected to gradually decline all the way through the next 2 weeks.
This does offer some concern for U.S. exports if the Mississippi river is not wide open for barge traffic.
December Corn Chart
Corn prices were up today, not a big move, but we remained close to the upper end of the range just below the $7 mark.
We have major chart support between 6.50-6.60 and the market has been stuck within this range for over a month.
It will very likely be next week’s October crop report that will determine if corn can break above the $7 mark or retreat towards chart support.
November Soybean Chart
Soybean prices posted a low over night Sunday night into early Monday morning and since then the soybean market has been trying to bounce.
That was enough to get the technical indicators to hook a little bit and it does appear the soybean market may be trying to form a seasonal bottom.
Another up day would certainly help in confirming seasonal bottom but nonetheless the chart and technical look good.
We do not want to be making any sales at this level.
December KC Wheat Chart
Wheat prices still in an uptrend, it is a consistent uptrend that’s been in place going back to the August lows at 8.08.
The wheat market has rallied over $2 and has pushed above the $10 mark.
The $10 to 10.10 level is an area of overhead resistance, that doesn’t mean we can’t go higher but its does present the level of overhead resistance matching the highs back in July.
With prices up at that $10+ range and technical indicators getting close to the overbought area this is not a place to be buying wheat.
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