TFM Daily Market Summary 9-7-21


The National Corn Index (NCI) has been sliding and the impacts of Hurricane Ida help break the cash market.  The NCI is a simple average of elevator bids for corn that is collected and published daily by DTN, as it takes information from over 1800 elevators.  The trend in the NCI has definitely turned lower since the highs in the cash market from the early summer, but last week saw a strong break.  This was influenced by the impacts of Hurricane Ida on the Gulf, damaging export terminals and weakening cash bids up into the Midwest.  Secondly, historically, September is a window when the cash market rotates to a more new crop market, and basis bids have a tendency to soften.  Processor and end user may feel “comfortable” about the supply picture, and the start of harvest brings new supplies into the pipeline, only adding to the pressure.  Last week, the index was trading at its lowest point since April, as the cash market softened and the weakening futures prices only helped add to the pressure.  On the board, September futures closed below $5.00, as the market has quickly added carry into the corn market, signaling a corn market that is not in need of corn supplies at this time.  Friday, the USDA will announce it next set of production, supply and demand numbers, but at least at this point the market feels that the U.S. will have adequate supplies.


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CORN HIGHLIGHTS: Corn futures were trading with small gains at the 7:45 pause but wasted little time going negative shortly after trade resumed, trading as much as 13-1/4 lower on the December contract. December finished down 13-1/4 cents to close at 5.10-3/4, its lowest close since mid-April. December 2022 lost 4-1/4 cents to close at 4.97-1/4. Cash prices continue to slip as harvest is quickly approaching. End users have been rewarded as of late if they have stayed on the sidelines. Commodities across the board were under pressure. With some hindsight, the news of the last week or so has been less than friendly. In no particular order, increasing cases of COVID, the impending harvest, weaker energy prices, and a poor jobs report leading to speculation that world economies are slowing may all be taking their toll on managed money which has been stubbornly strong. Add to the mix private forecasts suggesting a slight bump to yield expectations on Friday’s report coupled speculation that acreage could increase seems to be enough to keep bullish traders at bay. All this at a time when Hurricane Ida has disrupted export traffic in the gulf. Talk of a bumper China is noted as well.

SOYBEAN HIGHLIGHTS: Soybean futures posted a not so friendly reversal ending the session weaker with November leading todays decline closing at 12.77, down 15 cents.  August weather was mostly friendly for soybean production making it possible the USDA will increase yield on Friday’s report. For now, it appears the bears are in control of market direction, but prices are oversold enough that prices may stabilize, or improve ahead of the WASDE report. As mentioned in the corn report, news of late has been cumulatively negative enough to keep pressure on prices. Perhaps most concerning is the unknown for when and how much of the loading facilities in the gulf are operational. With harvest quickly approaching, and exports still slow, there isn’t much to get bullish traders excited. After trading with double digit gains earlier in the session, today’s poor close suggests it will take new bullish news to get traders exited. It is one thing to buy a dip and expect a price bounce. It is another to buy on strength expecting follow through buying to propel prices higher. Additional buying was missing this morning and it didn’t take long for soybeans to slide. With China mostly absent from the market confidence is lacking. This could be temporary as supplies will be confirmed as tight on Friday’s report. If China buys aggressively, it will be a sign they believe limited supplies, and this will provide the catalyst to a price recovery.

 WHEAT HIGHLIGHTS:  September futures inching closer to expiration, lost 5 3/4 cents, closing at 7.08 3/4 and December lost 6 1/2 cents, closing at 7.19 3/4.  KC September lost 5 1/2 cents, closing at 7.09 3/4, with a volume of only two contracts today, and December contracts lost 5 1/2 cents as well, closing at 7.17 1/2. After a small recovery at the end of last week, once again, fellow grains pulled on wheat prices today with little changing, if anything at all changing fundamentally for wheat.  Russian wheat continues to push higher with the export tax increasing, effective tomorrow.  Russian analysts are now forecasting the crop closer to 70 mmt if not less compared to the USDA’s August projection of 72.5 mmt – which is expected to drop on Friday. On the other hand, the Ukraine is still calling for a record crop projected at 80.6 mmt and Australia near record levels at 32.63 mmt.    For the first time in quite some time, a daily export sale of 327,300 mmt of hard red winter wheat for delivery to Nigeria for the 21-22 marketing year was reported. Grain inspections were pretty similar to last week’s with 381,551 mmt inspected compared to 316,844 last week. Spring wheat harvest was reported at 95% this week – compared to the average of 83% with Minnesota & South Dakota 100% complete.

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Bryan Doherty

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