Written Commentary
CORN
Prices were $.01-$.02 lower today in very choppy trade. Dec-24 jumped out to a 2 month high in early trade however fell back likely due to increased farmer selling. The next major resistance is the 100 day MA, currently $4.32. Spreads also weakened a touch. Crop ratings held steady at 65% G/E. IMO updated ratings suggest an average US yield of 183.2 bpa, just below the Sept-24 USDA estimate of 183.6. Conditions improved in only 3 states while declining in 12 and holding steady in 3. 92% of the crop is dented with 61% mature. 14% of the crop is harvested vs. 13% YA and the 5-year Ave. of 11%. Huge speculative buying in yesterday’s trade overwhelmed producer seller which appeared to carry over into early trade. As the speculative buying slowed, prices backed off a touch. Next Monday is the USDA Annual Small Grain Summary. This report provides the final carry out numbers from the just ended old crop marketing year. Historically this report has a slight bear tilt in with the December contract closing lower 15 of the 24 years since 2000. This report did feature limit moves in 2011 (down) and 2012 (up).
SOYBEANS
The soybean complex was mixed with beans up $.03-$.04, meal was $2-$3 lower while oil surged 130 – 150. Nov-24 beans also jumped out to a 2 month high before backing off on increased farmer movement. Next resistance is the 100 day MA at $10.84 ½. Oct-24 oil also reached a 2 month high surging thru its 100 day MA resistance at 43.32. Next resistance is at 46.00. Oct-24 meal pierced resistance at its 100 day MA before crashing back to lower levels on the day. Bean oil prices surged after legislation was introduced in the US House and Senate that would extend a new sustainable aviation tax credit for biofuels for 10 years while preventing foreign producers from accessing the credits. Spot board crush margins jumped $.05 to $1.53 bu. with bean oil PV rising to 40.4%, the highest in a month. Bean ratings held steady at 64% G/E. Overall ratings are still the highest since 2020 however the lowest of this season. Ratings increased in 7 states, fell in 8 while holding steady in 3. 65% of the crop is dropping leaves vs. 68% YA and the 5-year Ave. of 57%. Harvest has reached 13% vs. 10% YA and 5-year Ave. of 8%. At a political rally in PA yesterday former Pres. and current candidate Trump suggested that if he were reelected China would revert back to honoring a trade deal they struck in early 2020 where China pledged to buy up to $50 bil. in US Ag. goods, something that completed fell by the wayside as the Covid pandemic broke out. Perhaps these comments along with additional Chinese economic stimulus and lower interest rates is also lending support to the soybean complex. November soybeans also have a historical bearish tilt heading into next Monday’s USDA report with prices also closing lower 15 of the past 24 years.
WHEAT
Prices were $.04-$.08 lower across all 3 classes today. Early strength likely attributed to sharply higher trade elsewhere. Dec-24 KC has found support near its 50 day MA at $5.70 ¼. Same for Dec-24 MGEX just above $6.09. Spring wheat harvest is winding down having reached 96% while winter wheat plantings are at 25%. EU 24/25 soft wheat exports as of Sept. 22nd have reached 5.86 mmt, down 24% from YA. Although 5 firms participated, Jordan passed on making a wheat purchase in their recent 120k mt tender citing price too high. The Sept. Annual Small Grain Summary has produced balanced results in wheat with higher closes 13 of the past 24 years with 11 years being lower. Last year was the first time in 7 years the USDA raised their winter wheat production forecast in the Sept. Small Grain Summary.
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