CORN HIGHLIGHTS:

• After establishing a new low on the September contract, corn futures used some end-of-session profit taking to work off session lows. Market trade overall saw a “risk-off” mentality across multiple markets, which helped pressure grain prices. Dec corn was still 3 cents lower on the day, challenging the low established on 8/16.
• Pro Farmer crop tour is finding variable, but moderately good, yields, which may be confirming the possible corn supply available this harvest. Yesterday, Pro Farmer forecasted corn yield in South Dakota at 157.42 bu/acre and Ohio at 183.94 bu/acre, both above last year’s levels. Results for Nebraska and Indiana will be released this evening.
• Weekly crop progress showed good to excellent at 58%, off 1% on the week, with 15% poor to very poor, up 2% with 78% in the dough vs. 77% on average, and 35% dented vs. 33% on average, and 4% mature same as average. The hot weather will push maturity in most areas, and any impacts won’t likely be reflected until later.
• Demand will stay the focus of the market. The USDA announce a flash sale of 240,000 MT of corn to Mexico, split evenly between the 2024-25 and the 2025-26 marketing years.
• September corn options expire on Friday, which could lead to an increase in volatility as prices have a tendency to move to large areas of open interest. As of this morning, 13,900+ puts were open on the Sept 450 strike price.

SOYBEAN HIGHLIGHTS:

• Soybeans ended the day lower and were mainly dragged lower by a sharp selloff in soybean oil, which lost over 3% in the December contract. Soybean meal ended lower as well, as the hot and dry forecast is slated to end after Thursday of this week.
• It was a risk-off day for nearly all commodities today, with the stock market lower and the US dollar higher. This morning, more bank credit downgrades were reported with S&P Global Ratings downgrading several banks after Moody’s Investors Service downgraded 10 US lenders just two weeks ago.
• Crop progress was released yesterday, and the ratings were interesting given the hot and dry conditions. The good to excellent rating stayed the same at 59% when analysts were expecting a slight decline.
• The Pro Farmer tour in South Dakota found an average of 1,013 pods within 3 square foot averages, which is only slightly below the 3-year average. In Ohio, the counts came in at 1,049 pods.
• September soybeans on the Dalian exchange hit a new 2023 high today and are trading at the equivalent of $19.82 a bushel. This could explain the recent string of purchases from the US.

WHEAT HIGHLIGHTS:

• After a two sided trade, Chi wheat managed to eke out a positive close for the day, despite media outlets reporting that European public funds may be used to insure Black Sea vessels out of Ukraine. Despite the danger, this may mean more exports traveling along the coasts of Romania and Bulgaria.
• Spring wheat harvest has advanced to 39% complete, but this is behind the 46% average. Interestingly, the decline of 4% in good to excellent condition to 38%, did not create much buying interest from traders today in the HRS contracts.
• SovEcon increased their projection for the 2023 Russian wheat harvest from 87.1 to 92.1 mmt. This is adding to pressure in futures prices, as Russia continues to dominate the world export market.
• Northern Europe has had a significant amount of precipitation that has slowed harvest of winter crops, including wheat and rapeseed. The moisture has also caused concern about quality, as it has created optimal conditions for fungal growth.
• According to the India Meteorological Department, their monsoon rainfall is 7% below the norm, as of August 21, and supports recent talks that they are looking to import wheat from Russia due to a lack of supply.

DAIRY HIGHLIGHTS:

• No dairy content today.

Total Farm Marketing and TFM refer to Stewart-Peterson Group Inc., Stewart-Peterson Inc., and SP Risk Services LLC. Stewart-Peterson Group Inc. is registered with the Commodity Futures Trading Commission (CFTC) as an introducing broker and is a member of the National Futures Association. Stewart-Peterson Inc. is a publishing company. SP Risk Services LLC is an insurance agency. A customer may have relationships with all three companies. TFM Market Updates is a service of Stewart-Peterson Inc. Futures and options trading involve significant risk of loss and may not be suitable for everyone. Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.

Author

John Heinberg