Grains closed mixed on Monday:

Corn + 1 ½ cents/bu (Dec @ 3.66 ¾ )

Soybeans – 6 ¼ cents/bu (Nov @ 9.96 ¼ )

Chi Wheat + 6 cents/bu (Dec @ 5.50 ¼ )

Cdn $ +0.00140 (74.805 cents)

WTI Crude Oil +0.35/barrel (40.60)

Grain futures reversed course from their overnight and early day session trading patterns this afternoon.  Initially, it was the cereals that were very weak, and oilseeds that showed strength, but by midday, beans were trading down as much as 11 cents/bu while corn and wheat were up 4 ½ cents and 7 cents per bushel respectively.  Corn values were no doubt bolstered by USDA Flash Sale announcements this morning, although for the 3^rd business day in a row, there was no business directly attributed to China.  Large export sales were confirmed as follows:         

• 297,140 tonnes of corn to Unknown
• 110,800 tones of corn to Japan
• 218.300 tonnes of soybeans to Unknown

Soybean values bounced off of their lows for the day in sympathy with the good fund buying of corn and wheat futures today.  The USDA released their Weekly Export Inspections Report today that showed that the USA exported 1.2 million tonnes of beans last week.  OF that total, China took 550,000 tonnes, which is solid.  Last year, the USA shipped 986,000 tonnes of soybeans in the same week, but overall in September, the USA has moved 1.7 million tonnes more soybeans than they did a year ago.  A nice start to the 2020/21 marketing campaign.  Despite this fact, we traded lower, partly on the realization that Chinese business is likely to slow down, as that country celebrates it’s Mid-Autumn Festival beginning on October 1^st, lasting until October 8^th.  From a competitive perspective, the USA rules the roost into China until the new calendar year, when Brazilian beans hit China at a dollar a bushel discount to USA values – according to today’s offered values.  That fact has to create some concern over overall USA export potential.

Wheat futures posted a nice reversal, after trading lower overnight.  Initial weakness came on the heels of excellent weekend rains throughout Argentine wheat growing areas, were anywhere from 1 inch to 4 ½ inches were received.  However, a majority of the Russian winter wheat belt remains extremely dry, and that fact probably made early sellers in wheat nervous as the day went on.  The market was unable to penetrate the 200 day moving average on the December Chicago wheat contract, which allowed the futures to close 12 ½ cents/bu off of it’s lows.

After the close of trading, the USDA released their Weekly Crop Condition Report.  The trade was expecting to see the good/excellent crop ratings for corn and soybeans to remain unchanged from last week.   The average trade guesses for corn and soybean harvest were 17% and 18% complete respectively.  Actual data is listed below, there is nothing overly bearish or bullish in today’s crop condition updates, although market bears will be disappointed to see that soybean conditions have actually improved.  At this late date in the season, that would suggest that anecdotal harvest yield reports are slightly better than expected.

Wet conditions are expected to move through the eastern Corn Belt tonight, which will then give way to dryness for the rest of the week, as harvest is expected to gain traction in the Midwest.  Brazil got rains in it’s southern growing regions on the weekend, but the northern half of it’s corn/soybean belt remains very dry.  Rains are needed in the next couple of weeks to allow growers to start planting.  It’s not critical yet, but bears watching.  If and when rains materialize, that will take some production premium out of world soybean prices.

On the day, funds were thought to have been buyers of 5,000 corn contracts (now long an estimated 76,000), while selling an estimated 5,000 soybean contracts (long 189,000), and buying 7,000 Chicago wheat contracts (now long 9,000).