- Corn futures came under heavy selling pressure as selling in the wheat and soybean market weighed on futures, and the prospects of a proposed government shutdown on Sunday triggered risk off trade across the markets. December corn lost 11 ¾ cents on the day but was down only ½ cent on the week.
- September 1 corn stocks in the USDA Grain Stocks report were less than expected at 1.361 billion bushels, which was below market expectations and last year’s levels. Though the numbers were friendly to expectations, the corn supply is still large, and a surprise increase in the wheat harvest forecast pressured corn prices.
- U.S. corn demand saw a little energy as the USDA announced a flash sale totaling 223,540 mt (8.8 mb) of corn to Mexico for the current crop year.
- Harvest pressure continues to grow, and the increase in harvest bushels has weighed on basis levels and the cash market. Last week the crop was 15% harvested and should increase this week.
- Corn futures look soft technically with the weak close on Friday. Additional price follow-through could take place to start next week, and prices may be poised to retest or establish a new low.
- Soybeans ended the day sharply lower to end the week, and month, following a bearish quarterly Grain Stocks report. For the week, November soybeans lost 21-1/4 cents, and for the month, they lost 93-3/4 cents. Non-commercial traders have been unloading their net long positions over the past few weeks, with more selling today.
- In today’s report, old crop soybean stocks as of September 1, totaled 268 mb. While higher than the 242 mb that trade was looking for, it is still very tight, and 2% below this time last year. Soybean production for 2022 was also revised down by 5.93 mb from the previous estimate.
- For 2022, planted area was unchanged at 87.5 million acres but harvested area was revised to 86.2 million acres. The yield for 2022 was also revised to 49.6 bpa, up 0.1 bushel from the previous estimate. Overall, the report had a negative reaction with an increase in ending stocks but a decrease in production.
- The U.S. soybean harvest should pick up speed in the coming days with little rain expected over the next week. Drought conditions are still prevalent in the Midwest, and heavy rains would be needed to improve soil moisture levels.
- All three U.S. wheats had double-digit losses across the board after a negative reaction to today’s reports. September 1 wheat stocks came in at 1.780 bb versus 1.774 bb expected and 1.778 last year. Additionally, U.S. all wheat production was estimated at 1.812 bb versus an expected 1.731 bb, and last year’s 1.650 bb.
- Despite negative data today, there is still a silver lining for wheat bulls with weather problems that may affect global production. There is talk of Australia’s crop being lowered to 23-25 mmt, and also lower EU crops. In addition, Argentina’s wheat crop ratings are up from last year’s 14% good to excellent, but still a dismal 22% GTE.
- The drop in prices today might make U.S. wheat more competitive on the world market, but Russian exports are still a concern. After Egypt purchased wheat from Romania and Bulgaria, it was said that Russia is now offering wheat for export around $245-$250 per mt.
- The potential for a government shutdown may also be weighing on commodities as money flows out of the market. In addition to wheat, many commodities including corn, the soybean complex, and livestock, all posted losses. And as of writing crude oil is also down nearly a dollar per barrel.
- According to the USDA, as of September 26, approximately 47% of the winter wheat production area is still in drought, while 51% of the spring wheat production area is in drought.
- Class III futures were mixed today, nearby contracts found gains while May-Dec ’24 contracts were nearly all taking losses.
- Class IV was neutral to lower, the lower were some significant losses though, led by a 35c loss in the November ’23 contract.
- The spot markets were mixed, butter finally was softened and sold off 3.5c while cheese managed to slice off some gains Friday.
- Quarterly stocks report pushed grain markets lower as plenty of wheat, corn, and soybean contracts were in double-digit losses.
- As of this writing, the government shutdown seems all but inevitable as the House appears unable to pass a temporary funding option.
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