Blogging by the Bushel
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Market Report

Monday October 2nd, 2017

December 17 corn closed down 3 ¾ at $3.51 ½ and March 18 closed down 3 ½ at $3.64 ¼. November beans closed down 11 at $9.57 ¼ and January 18 closed down 10 ¾ at $9.67 ¾. December wheat closed down 3 ½ at $4.44 ¾ and July 18 closed down 1 ¾ at $4.89. Crude oil closed down $1.05 at $50.90.

The corn market started the new week with a resounding thud, finishing Monday 3-4 cents lower. Overnight, the corn market tried to be the “bull anchor” of the ag complex, respecting the results from the Sept 29th reports, but struggled to keep the fires burning into the day. The funds were viewed net sellers of about 15,000 corn today, which would leave them net short 164,000 corn futures and options. In a seemingly recurring theme, the USDA reported much less corn harvest progress than expected. U.S. farmers harvested 17% of the corn crop through Sunday, advancing only 6% for the week, and was 9% behind the five year average. The report would imply just over 13 million acres have been cut to date. The USDA found 68% of the corn black-layered, or “mature”, down from 84% last year and 78% average.  In one last, fitting, slap in the face to the bull, the USDA raised corn conditions 2% G-E, taking it to 63% vs. 73% G-E last year. Also after the close, analysts at FC Stone “trued up” their estimates with the USDA, taking yield projections to 169.2 bpa from 166.9 bpa prior. This would result in a 14.129 bil bu crop, which is close to current gov’t projections.

The soybean market extended its break, unable to build on Friday’s reversal trade as harvest supply side realities are too much to fight off. Yield reports continue to come in strong overall with the not-so-great stuff outweighed by the much better than expected, overall. Rains in Brazil provided good coverage over the weekend for the South into the Center of the country with rains forecasted the next couple of days to reach most of the northern areas including Mato Grosso. Not that you needed more fuel for the bear but there seemed to be a macro component to selling to today’s weakness with grains, meats, energies, softs and metals all for the most part under pressure with the dollar and the equities saw money flows coming in.  First day of the month/quarter is typical to see re-positioning.

The wheat complex struggled overnight, with Mpls finishing the weakest, while Chicago and KC were around a nickel lower. Trade continued to react to the crop report data from Friday morning at least during the early part of the day, but over the latter half of the session trade started to battle back. After the close the complex looks to have received another boost with the GASC announcement that Egypt was back in for wheat. Russian wheat prices have firmed over the past several weeks, and offers in the morning should be several dollars above offers from a few weeks ago. This was the fourth week for winter wheat planting progress, and the USDA said winter wheat planting moved up 12 and is now 36% complete vs 41% this time last year and 43% normal. Export loadings this morning were well above expectations, coming in at 692 MT vs an adjusted 502 MT last week and vs 663 MT this time last year. Total shipped to date is 9.921 MMT vs 10.139 MMT last year.

Anna Kaverman

anna@mercerlandmark.com

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