CORN
- Yesterday’s data indicated corn acres up 800,000, which was more than expected. So, despite a reduction in yield, total production was slightly increased.
- December corn saw a low yesterday of 473-1/2 – this is equal to the low on August 16th. If corn can hold above this low, it may indicate that a bottom is in (at least in the near-term). However, breaking below this support level could lead to more downside.
- Drought around the Panama Canal has reduced water levels and is cause for shipping concerns into the end of the year.
- The next big day for the market (in terms of data) will be the quarterly grain stocks report on September 29th.
SOYBEANS
- Soybeans had a negative reaction to yesterday’s report. While there were no significant surprises, fresh bullish news may have been what was needed to see a rally.
- Assuming normal weather, the USDA is forecasting South American soybean production to rise by 30 mmt in 23/24.
- Global vegetable oil markets are beginning to see a turnaround with higher palm and canola oil. This is helping soybean oil to rally this morning.
- November soybeans have broken below the 13.50 support area, with the next support at the 200 day moving average, around 13.30.
WHEAT
- In yesterday’s report, the USDA lowered wheat production in Australia, Canada, the EU, and Argentina.
- News outlets are reporting that overnight Ukraine attacked the Russian port of Sebastopol in Crimea. This increase in tensions will likely add further support for wheat.
- Managed funds held a large net short wheat position into yesterday’s report. Given the reduction in the global production estimate by 7 mmt, and the news out of Crimea, the market may be seeing some short covering in wheat this morning.
- Hungary, along with Romania, Slovakia, and Bulgaria, has indicated that they will implement bans on the importation of Ukrainian grain, if the EU does not extend the current ban that expires at the end of this week.
Author
Brandon Doherty