CORN

• Corn futures are starting the week higher following a cut to national yield by the USDA on Friday. December corn futures are 3 cents higher at 533-1/4 while July 2027 corn futures are 3-1/4 higher at 559-1/2.
• Crude oil prices climbed back above $103 per barrel following a weekend drone attack on a Saudi Arabian pipeline. The pipeline handles roughly 4% of global oil flows, making the disruption particularly significant with continued uncertainty surrounding the Strait of Hormuz. Rising crude and diesel futures, now above $6 per gallon, are also adding to inflation concerns.
• Wet conditions will hamper harvest progress across parts of the Upper Midwest. More than 3 inches of rain is forecast across much of Iowa, keeping already-saturated soils wet and slowing fieldwork. Drier conditions should allow harvest to make better progress across the southern Corn Belt over the coming week.

SOYBEANS

• Soybean futures are bouncing back after Friday’s sharp reversal lower. November soybean futures are 10-1/2 higher at 1307 while March futures are 11 higher at 1330.
• An unexpected increase in USDA’s soybean yield estimate gave traders another reason to take profits following the market’s recent rally. Despite the higher yield, USDA lowered projected ending stocks to 310 mb, providing some underlying support to the market.
• China is estimated to have purchased roughly 13 MMT of the 25 MMT in U.S. soybeans pledged last fall. The U.S. and China are scheduled to meet later this month in Washington, D.C. While the meeting is widely viewed as more of a good-faith gesture than a forum for negotiating new trade agreements, the market will be closely monitoring any developments that could impact soybean demand.

WHEAT

• Wheat futures are lower to start the week. December CBOT wheat futures are 8 lower at 717. December KCBOT wheat futures are 8-1/2 lower at 790 while December MIAX wheat futures are 5 lower at 740.
• The September WASDE made no changes to the U.S. wheat supply or demand balance sheet. However, USDA cut wheat exports from Russia and Ukraine by a combined 4 MMT, with traders expecting additional reductions in future reports as Black Sea export disruptions continue.
• Wednesday’s Fed interest-rate decision could impact wheat through its effect on the U.S. Dollar Index. Recent hotter-than-expected inflation readings have increased expectations for a more hawkish Fed, which could strengthen the dollar and add pressure to wheat prices.

Author

Keegan Madigan