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September 28th - Midday Market Commentary

09/28/2021
September 28th - Midday Market Commentary

Grains are lower at midday:

Dec Corn – 4 ½ cents/bu (5.3)

Nov Soybeans – 10 cents/bu (12.77 ½ )

Dec Chi Wheat – 12 cents/bu (7.10 ¼ )

Cdn $ -0.00350 (78.88 cents)

WTI Crude Oil -0.62/barrel (74.83)

Grain values have fallen since the start of the day session, as weakness in outside markets pressure both equities and commodities this morning.  At the time of writing, Dow futures are down almost 500 points (34,275), and Nasdaq futures are down over 350 points (14,835).  Concerns are mounting over the US federal government, after House Republicans blocked a Democratic bill that combined funding for the government through December, while raising the USA debt ceiling.  This uncertainty has pulled money out of stock markets and commodities, and fuelled buying of the US dollar, which in itself causes headwinds for grain futures, since they are traded in US dollars.

This morning, the USDA did announce a Flash Export Sale of 150,000 tonnes of US corn to Mexico for shipment in 2021/22.  It was hoped that this would provide some support to corn values at the opening of trading, but overall market weakness could not be ignored.

Many analysts are starting to lower their projections for the overall 2021 USA corn and bean harvest, based on anecdotal reports of disappointing yield results in much of the Eastern Corn Belt.  While the Western Belt has largely exceeded expectations, heavy disease pressure in corn and dryness in late August appear to be taking a toll on yields in the East.  That normally should be supportive to crop prices, and was earlier today, before the “risk off” momentum spread to grains from other markets.

Some traders are also lightening their positions ahead of Thursday’s USDA Quarterly Stocks Report.  Overall expectations are for a friendly report, but this September report always throws a curveball or two at the market, so as traders move to the sidelines, lower traded volumes will result in bigger market moves.

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