MARKET HIGHLIGHTS
- Markets trading higher overnight with wheat seeing the best strength.
- USDA surprised everyone yesterday with their big corn/bean yields.
2017/18 US Production |
Actual |
Average |
Range |
Last Month |
Corn Production |
14.184 |
14.035 |
13.878-14.249 |
14.153 |
Corn Yield |
169.9 |
168.2 |
166.7-170.9 |
169.5 |
Corn Acres |
83.5 |
83.428 |
83.1-83.5 |
83.496 |
Bean Production |
4.431 |
4.328 |
4.179-4.417 |
4.381 |
Bean Yield |
49.9 |
48.8 |
47.1-49.8 |
49.4 |
Bean Acres |
88.7 |
88.75 |
88.2-89.48 |
88.731 |
2016/17 US Ending Stocks |
Actual |
Average |
Range |
Last Month |
|
Corn Stocks |
2350 |
2.340 |
1.964-2.380 |
2.370 |
|
Soybean Stocks |
345 |
370 |
331-477 |
370 |
|
|
|
|
|
|
|
2016/17 World Stocks |
Actual |
Average |
Range |
Last Month |
|
Corn Stocks |
226.96 |
227.99 |
225.1-229.1 |
228.61 |
|
Soybean Stocks |
95.96 |
96.8 |
95.5-98 |
96.98 |
|
Wheat Stocks |
258.83 |
258.57 |
25705-259 |
258.56 |
|
|
|
|
|
|
|
2017/18 US Ending Stocks |
Actual |
Average |
Range |
Last Month |
|
Corn Stocks |
2335 |
2.180 |
1.898-2.420 |
2.273 |
|
Soybean Stocks |
475 |
442 |
375-524 |
475 |
|
Wheat Stocks |
933 |
920 |
875-943 |
933 |
|
|
|
||||
2017/18 World Stocks |
Actual |
Average |
Range |
Last Month |
|
Corn Stocks |
202.47 |
200.74 |
189.4-223 |
200.87 |
|
Soybean Stocks |
97.53 |
97.39 |
95.2-99.5 |
97.8 |
|
Wheat Stocks |
263.14 |
264.3 |
258-268 |
264.69 |
|
- Stocks to usage levels are a little more bearish for corn than a year ago when Dec. futures made a low near 3.15.
- Bean stocks to usage is more bearish than how the 2016/17 to
- There will continue to be much debate over yields with earliest yields lacking of any major issues.
- FSA acres out yesterday afternoon would suggest the USDA currently is 0-500k too low on corn acres and around 1m acres too low on beans.
- China announced yesterday afternoon that they would like to expand their ethanol program nationwide by 2020 to reduce pollution and clear out corn supplies. It is a ways away, but a potential new source for corn demand, which has been good but relatively stagnant lately.
- Corn continues to track similarly to 2005 when there was a bounce off the lows following the Sep. crop report before resuming the lower trend.
- Corn technically remains in a lower trend, but there is potential for a double bottom if yesterday is low holds. Resistance is at 3.57 and support at 3.50.
- Beans bounced off moving average support yesterday in the mid-9.40’s. Overnight resistance was seen at 9.60. The market is mid-range with a lack of a trend.
- Wheat put in a bullish outside up day following the USDA. Resistance is at 4.60 and support 4.15.
- USDA reported 167,370 MT of soybeans to Mexico for 2017/18.
WEATHER
- Rains seen moving across the N. Midwest the next couple of days. The 6-10 has spotty showers, but then a more widespread event is seen during the 11-15 period.
- Temperatures are expected to run above average for much of the next two weeks.
- Overall, nothing too significant.
OUTLOOK
- Bearish corn/soybean numbers from the USDA have not had that much of a negative impact on corn/beans yet.
- The corn S&D is similar to a year ago, which makes me skeptical that we have seen our lows, so for now I think the path of least resistance is lower. The China ethanol story could be big a few years out, but is not going to clear out any significant supplies in the near term.
- Soybeans had a bearish report yesterday and a bearish FSA acre report. The market has been able to bounce, but there is a bearish seasonal that kicks in during the second half of September as well. For all of those reasons, I think there is downside risk from here.
- Wheat had a strong bullish reversal yesterday for the third time since mid-August. If corn/beans can stabilize, wheat may be able to attract some buyers following the bullish technical signals.