Blogging by the Bushel
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Market Report

Wednesday October 4th, 2017

December 17 corn closed down 1 ¼ at $3.48 ¼ and March 18 closed down 1 at $361 ¼. November beans closed up 3 at $9.58 ¼ and January 18 closed up 2 ¾ at $9.68 ¾. December wheat closed down 6 at $4.42 and July 18 closed down 3 ¾ at $4.86 ¼. Crude oil closed down $.42 at $50.32.

Corn could best be described as “indecisively bearish” today.  It sure looked like the past couple days would catch up with the market, as values floated down to major support close to $3.45 December with a little momentum on its side mid-morning.  The “bad trade” was not to be, though, no doubt adding to recent trader frustrations in a market that is struggling with follow-through in either direction. The funds were believed net sellers of another 5,000 corn, which would take their net short to 175,000 combined futures and options. Fresh news was a precious commodity today. Outside of a small handful of gov’t reports, traders had to content themselves by picking through harvest reports and poring over Brazil precip maps. So far, the markets have not paid much heed to the lack of rain in Brazil’s key Mato Grosso province. Likely still too early in the planting season to worry, particularly with a low confidence rain event slated for mid-month. On the US harvest front, most of the Midwest had a welcome day of dry weather, excepting Central KS and a small band in S IA & WI. In a big picture sense, cooler temps are on the way, though rain is also expected to be more intermittent and less-focused on the West.  Eastern China corn harvest areas are also struggling with rain.

Soybean prices got a small boost from technical buying, earning back all of Tuesday’s minor losses and more. Ahead of Thursday morning’s USDA export report, trade estimates for soybean exports range between 36.7 million bushels and 47.8 million bushels. That would put it well behind the week ending September 21, which posted an impressive 114 million bushels. USDA has posted relatively few large export sales to start October, compared with 14 such sales reported during September. Brazil expects to export more than half of its soybean crop in 2017, for a total of 2.352 billion bushels. That number could be even higher in 2018 – with as many as 2.389 bushels getting exported. Brazil’s total soybean production for 2017/18 is estimated at 3.987 billion bushels.

Monday’s late bounce in both Chicago and KC was encouraging, and that gave trade some optimism during Tuesday’s session, but anything that was attained during that short time frame, was surrendered after Wednesday’s price action. Price action was on the defensive for much of the day and finished right off its lows in Chicago. With the GASC tender now out of the way, the markets were looking for fresh news to trade off of, but found very little. The problems Australia and even to an extent Ukraine is facing is offset by the huge Russian wheat crop, but these are issues that are already in trade. Export sales have been ho-hum over the past several weeks, and that is not expected to change much tomorrow. The export line up in general is pretty light, outside of Japans weekly tender tonight. The market is developing a lot of overhead following Friday’s crop report and Chicago’s early week struggles with the $4.50 level again. It does not mean we cannot get a rally above that level, it just may be difficult to find a trigger that will spark the move.

Anna Kaverman

anna@mercerlandmark.com

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