Blogging by the Bushel
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Market Report

Thursday August 31st, 2017

December 17 corn closed up 12 ¼ at $3.57 ¾ and March 18 closed up 12 ¼ at $3.70 ½. November beans closed up 12 at $9.45 ¼ and January 18 closed up 12 at $9.54 ¾. December wheat closed up 4 ¾ at $4.34 ½ and July 18 closed up 5 at $4.83 ½. Crude oil closed down $.49 at $46.51.

The corn market finally managed to find a good rally today – a feat we have not accomplished in roughly three weeks. It looked like more of the same early, with a steady/lower night session carrying over into the day open. The market would ultimately close $.12 higher, erasing five days’ worth of negative trade.  The funds were viewed net buyers of roughly 25,000 contracts today, as they likely found themselves slightly over-extended after a recent selling binge.  They will likely go into tonight short 110,000 corn futures/options. There did not appear to be a single fundamental driver behind today’s rally. It may have been a simple combination of an oversold market, seasonality (not unusual to see a market bottom near Sept 1), and a couple dribbles of good (minor) news talking points. It was also the end of a month, which can often be a time for funds to deploy new monies or sew-up existing positions. There were also only 844 deliveries put out against Sept overnight, which was far less than expected.  Simply getting that contract behind us may have helped. Export sales offered a rare glimpse of good news this morning, nearly topping 1 mmt in new business for the first time in months. Sales were 188,400 mt for old crop and 804,200 for new. China made an appearance, along with unknown, Japan, and some Latin business. Watch for plenty of private corn production estimates to trickle out over the next couple of weeks in advance of the USDA September crop report.  FC Stone drew first blood tonight, projecting a 13.94 billion bushel US harvest on a 166.9 bpa yield. This compares to the USDA’s controversial August estimate of 14.153 billion on a 169.5 bpa yield. Market still on “frost watch” for early September, though early indications suggest temps will not get cold enough to stimulate a hard freeze for most.

A strong session led off today by a sharp rally in corn futures. End of the month short covering, seasonal buying and lack of deliveries had values on the rise. Southern US harvest expected to resume. Louisiana gulf loading operations are back to normal having no damage from the storm system. Rail in Texas is more of a concern. There is speculation the rail stoppage from flooding could last up to 6 weeks. Soybean exports fell within range with 123.2 mt sold for the 2016 marketing year. And 1.55 mmt sold for 2017. Crop estimates started to trickle out with FC Stone leading off with a national yield of 49.8 bpa and a production number of 4418 mb. This 2.1 bu. above last month. The USDA is already a week into their data collection process for the US soy crop and should be able to make better assessment with higher maturity and further filling of soybean pods. Still the crop is in flux since soybeans remain indeterminate through September. The funds were estimated buyers of 5,000 contracts today.

The wheat complex finished the night mixed with Chicago and KC hovering around unchanged to a little better, while Mpls was under pressure after huge deliveries overnight. Export sales this morning were at the high end of expectations, coming in at 536 MT, with an additional 30 MT of new crop for combined sales of 566 MT. Total sales to date are 444 mb vs 435 last year. Stats Canada released their first production estimates of the year. Remember, the data from Stats Can is the result of a farmers survey conducted over the July 19 to August 1 time frame. Stats Can pegged their total wheat crop for 2017 at 25.541 MMT vs 31.729 MMT last year.

Anna Kaverman

anna@mercerlandmark.com

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