Blogging by the Bushel
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Market Report

Tuesday September 5th, 2017

December 17 corn closed up 3 ¼ at $3.58 ½ and March 18 closed up 3 ¼ at $3.71. November beans closed up 19 at $9.68 ½ and January 18 closed up 19 at $9.78 ¼. December wheat closed up 4 ¼ at $4.43 and July 18 closed up 1 ½ at $4.87 ¼. Crude oil closed up $1.15 at $49.14.

The corn market started the short week with modest gains in a quiet, rather unenthusiastic trade. Managed Money traders were viewed net buyers of about 6,000 contracts today, which would leave them net short just over 100,000 corn futures/options.  Among other things, the market seemed interesting in putting a little “frost premium” in, as we are expected to see the coldest temperatures of the season in the Midwest tonight into tomorrow night. Most weather gurus seem to believe that damage will be minimal. If correct, this is enough for a so-called “soft frost”, but falls well short of the “hard freeze” needed to harm corn yield prospects. Hurricane Irma may also bring some threatening rain, flooding and wind, to the southeastern states and the system needs to be closely monitored. Net drying is expected for most of the Midwest, which is likely a good thing for corn as we wind down the growing year. Crop progress report after the close found a small downtick in national condition ratings, which is typical for this late in the season. 61% of the crop was rated Good-Excellent, -1% wk/wk, and compares to 74% G-E this time last year. Perhaps more importantly, 60% of the crop was dented (off 8% from avg), while 12% was considered mature (off 6% from avg).  Need to be black-layered (aka “mature”) to avoid frost damage.

The soybean market started the holiday shortened week with a gap higher and never looked back. The buying today was fueled in part by ongoing export demand with the USDA flashing another 136 mt of beans sold to China. It was partly fueled by a cooler and drier weather forecast that is not ideal for finishing the crop.  It was partly fueled by short covering with the charts taking a more positive near term posture and a USDA crop report one week out. Forecasts lack any crop damaging cold the next couple of nights but many areas of ND, SD, MN, WI will drop to the lower 40′s. Crop conditions report this afternoon showed soybeans unchanged at 61% gte while pvp also held steady at 11%. The states that saw the greatest improvement were TN +6 and WI +2 while the states that saw the greatest deterioration were LA -14, MI -2, MS -9, NC -5 and ND -4 – good ole’ USDA rounding to smooth out to unchanged overall.  The crop is 11% dropping leaves up from 5% last week. Soybean export inspections totaled 645 mt compared to 737 mt a week ago and 1.232 mmt this week a year ago.

Price action across the wheat complex was better overnight, with Chicago the strongest. The COT report on Friday may have been a supporting factor as it showed funds increasing their new short position, while most were looking for a small reduction. When the day session began, trade settled into a trend familiar to what we saw late last week. Chicago did not have the energy to extend gains, but there was enough interest to keep prices slightly higher throughout the day. Export inspections this morning were disappointing, and the export lineup this week is off to another quiet start. Spring wheat harvest moved up 13 to 89% complete. This is 11% ahead of the 5 year average of 78%, but still slightly behind last year’s pace which was 90% complete.

Anna Kaverman

anna@mercerlandmark.com

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