9/9/21

Morning Commentary 9/9/21

CBT Dec Corn Sinks to Test 200 Day Moving Average on Gulf Export Concern; FAS Program Data Substantially Complete-Sorghum Acres to Rise

6:30 CT CBT Prices: Nov soybeans are down 3.50 cents at $12.75, Dec corn is down 3.25 cents at $5.07 with December Chi wheat down 10.50 cents at $6.99.

AgResource Morning Grain/Soy Comment & Analysis: Good Morning! CBT futures remain liquidation ahead of the USDA September Crop report which is due tomorrow. Demand concern on Gulf export closures persist, though Entergy reports that 90% of New Orleans has power and remaining outages are down to around 300,000 customers. NOLA lights are being restored, but US exporters are still awaiting power to restart their operations. The lack of a Gulf export cash market continues to cause a demand worry for the CBT.

FSA in a snafu released their September Farm Program on early Wednesday which forced them to update the data to all later in the day. Total US Program acres that are being cropped/failed or enrolled in the Prevent Plant program as of September 1st were 255.7 Mil acres, 1.1 Mil acres more than 2020. The expanding use of electronic farm program signup and the rapid spring planting program has allowed NASS to update their planted/harvested acres total based on the FSA data in September. A few additional million acres of cropland may be uncovered, but with just 34,000 farms of 2.55 million yet to report, the FSA data is substantially complete. ARC research argues that NASS US corn/soybean acres are correct within a variance of just 100,000-500,000.

Sorghum is the crop where NASS will likely make the biggest upside adjustment with FSA reporting program acres of 6.95 Mil acres on September 1st with NASS estimating crop year seeding at 6.5 Mil acres. It appears that NASS is understating US sorghum acres by 600-750,000 acres relative to FSA. Look for NASS to adjust US sorghum seedings up by at least 550,000 acres tomorrow.

USDA is expected to release low weekly US export sales data on Friday morning due to the Gulf cash market closure. Sales will be well down from recent weeks with importers complaining about the lack of Gulf offers.

Political strife is growing in Brazil with widespread protests and new blockades of roadways by truckers that are sympathetic with President Balsonaro. The strikes are partially lifted this morning, but the worsening protests against Balsonaro is causing a slowing of grain to ports. The situation must be closely followed as a new planting season begins in several weeks. The Brazilian real has fallen this morning to 5.33 vs 1 USD.

World wheat millers continue to step forward to extend their forward coverage. Saudi Arabia issued a new wheat tender for 360,000 MTs, Jordan for 120,000 MTs and Tunisia for 100,000 MTs. Jordan passed on a feed barley tender citing price. World feed wheat and barley values are now trading well above corn, which makes corn the cheapest feedgrain for importers. 

Malaysian November palmoil futures fell 86 ringgits at 4,392 RM/MT. Paris December wheat is down €3.75 at €238.25/MT. Dalian January corn fell by $.04 to $9.71/Bu while December soymeal fell by $4.80/MT to $559.20.

The Gulf loadout woes due to Ida is masking tightening world grain supplies. The key 200 day moving average crosses at $5.045 in December corn futures.

December Corn Futures Testing its 200 Day Moving Average at $5.045.

North American Weather Pattern Discussion: The primary US weather models agree and our confidence in the forecast is high.

A Ridge of high pressure holds across the West Central US which will block meaningful rainfall from reaching into the Plains, Delta, or the Midwest in the next 6-7 days. A cold front passes through the W Midwest late Wednesday and Thursday, which produces a lite to moderate showers of .25-1.00”. The Delta and the E Midwest hold in a dry weather pattern into September 20th. The first 20 days of September will be record dry across the E Midwest/Delta. ARC hears reports that top soybean pods are not filling.

The 10-day rainfall map is from the EU model. There is no evidence of any frost risk for Central US crops into Sept 24th.

Central US high temps will range from the mid 70’s to the lower 90’s or some 8-12 degrees above normal. This is a very warm weather pattern for the Central US. Beyond September 25th, the risk of crop loss due to a frost is negligible. The extended range forecast calls for dry and ongoing warm conditions. The Central US harvest pace should be swift to start in the next 2 weeks. The only issue will be dryness for winter wheat.

Summerlike Warmth to Continue Across the Central US into late September: 

Limited Rainfall for the E Midwest and Delta Next 10 Days: 

Much Above Normal Temps Draw Soil Moisture Lower

No Sign of the Rainy Season Starting Across N and C Brazil for the next 2 Weeks: 

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