Grains closed mostly higher on Monday:
Dec Corn + 12 ¾ cents/bu (5.39 ½ )
Nov Soybeans + 2 ½ cents/bu (12.87 ½ )
Dec Chi Wheat – 1 ½ cents/bu (7.22 ¼ )
Cdn $ +0.00270 (79.24 cents)
WTI Crude Oil +1.42/barrel (75.40)
Grains had a good day today, with initial support coming from strong outside markets, and from signs that the US Gulf export program is starting to pick up as more terminals come back on line. Some South American weather concerns are also creeping into market discussions, providing support .
Corn futures closed within a ½ cent per bushel of it’s high for the day. Overnight, corn values were negative, but with the start of the day session, values quickly turned positive. While Midwest corn harvest reports from Iowa are exceeding expectations, anecdotal reports from Illinois and Indiana are showing less impressive results. All in all, pundits are suggesting that average US corn yield come down slightly from current USDA projections. Brazil reported that their 1st corn crop is 28% planted versus 18% at this time last year. Most of the country faces a severe subsurface moisture deficit, although there are rains in the forecast for the next 15 days. However, those forecast rains are not as heavy today as were predicted last Friday. There is the presence of another La Nina in the Pacific again this year, raising the possibility of another drought for southern Brazil and Argentina. That possibility was credited as a market influence today. Current USDA world corn supply and demand tables are factoring in a Brazilian corn crop that is 32 million tonnes bigger than this past year………….we cannot afford to have a short South American corn crop.
Soybeans tracked corn higher initially today, but lost a lot of it’s gains by lunch time. Unlike corn, Midwest soybean yields are generally better than expected, leading many analysts to believe that average US bean yield might be increased in the October USDA Crop Report. USA export soybean shipments need to pick up the pace, and soon. There is still time to make up for the lack of exports due to Hurricane Ida, but new crop South American supplies hold a significant price advantage February 2022 forward.
This morning, the USDA announced a Flash Export Sale of soybeans to China of 334,000 tonnes (12.3 million bushels) for shipment in 2021/22.
The USDA Weekly Export Inspection Report was issued this morning, for the week ended Thursday, Sept 23rd. Shipments were at the high end of expectations for both corn and soybeans, but fell below the lowest trade guess for wheat. The fact that more Gulf terminal capacity is coming back on line has certainly helped shipments. 4 bean cargoes were loaded for China last week, with 3 of those coming out of Gulf terminals. Wheat shipments at 10 week low of only 10.5 million bushels were very disappointing.
USDA Weekly Crop Condition Report was released after the close of trading, and it showed that both corn and soybean crop conditions were unchanged from last week at 59% and 58% good/excellent respectively. That is in line with trade expectations. The trade expected that 19% of the corn crop was harvested, the USDA confirmed that as of Sunday night 18% was off. The trade expected for 15% of the bean crop to be in the bin, and the government confirmed that 16% was actually harvested. Corn harvest is slightly ahead of the 5 year average, whereas bean harvest is slightly behind. At any rate, today’s Crop Condition Report is market neutral.
On the day today, funds were thought to have been big buyers of corn futures, picking up an estimated 12,000 contracts (now long 225,000). Funds were also thought to have bought 3,000 soybean contracts (now long 57,000), while being sellers of 2,000 Chicago wheat contracts (now long 15,000).