Written Commentary
SOYBEANS
Soybean ended sharply lower. Wetter US Midwest 2 week weather forecast, fact USDA NASS increase weekly US soybean crop ratings and concern about US soybean demand all triggered selling below key support. SU ended near 13.23. with a range 13.12 to 13.50. Some feel China could take less soybeans due to cooler ration( less soymeal) and lower crush margins. There is also concern that Brazil could sell China soybean in Oct and as early as late Jan 2022. Key will be fact nearby Brazil soybean prices are higher than US in if Brazil has an early and good 2022 crop. Some though report than some China crushers are running tight on soybean supplies and may need to start buying US soon. There is also concern that like last year, US August farmer crop survey could estimate the US yield near 53. Final US 2020 yield was 50.2 once NASS started to use field data. USDA rated the soybean crop 60 pct G/E vs 58 last week and 73 ly. Crop improved in IL, IN, KY, LA, MI, MS, OH and TN.
CORN
Corn futures traded lower. A more normal US west and east Midwest 2 week weather forecast and concern about US corn demand offered resistance. Corn futures also followed the lower soybean, soymeal and soyoil trade. CU ended near 5.50 with a range 5.46 to 5.63. CZ ended near 5.52 with range 5.47 to 5.65. Lower futures prompted domestic corn crushers to raise the posted bid. US farmer remains a reluctant seller until more is known about their actual yields. China needs to buy corn. Some feel they are waiting for either USDA report low or harvest low to begin to buy. Some feel they could take more the 32 mmt all origin. Last year, USDA farmer August survey corn yield was 181. China might be waiting for same this year. Final US 2020 corn yield was 172 once NASS started to use field data in Sep. USDA WOB could also decide to keep Brazil corn crop near 93 mmt despite talk the crop could be as low as 77. USDA est Brazil corn exports near 28 mmt which could be 10-12 mmt too high. Brazil is already buying 3-5 mmt Argentina corn for domestic use and Brazil domestic corn prices in near record high and above export prices. USDA dropped crop rating from 64 pct G/E to 62. Crops dropped in IA, MI, MN, MO, ND and NE.
WHEAT
Wheat futures were mixed. Lower corn and soybean prices action offered resistance. WU ended near 7.24 with range 7.17 to 7.34. KWU ended near 7.06 with range 6.95 to 7.11. MWU ended near 9.19 with range 9.04 to 9.27. Over the last few days, Chicago and especially KC wheat futures have rallied against Minn. Some feel that either KC and Chicago wheat got too cheap vs Minn or Minn to high vs the winter wheats. There is no new concern about US spring wheat except quality look better than expected and USDA NASS did increase spring wheat ratings from 9 pct G/E to 10 and vs 73 last year. There is still concern that a lower Canada and Russia wheat crop could drop World exports stocks by 20 mmt. That could support higher prices and need for higher prices to increase US/World wheat acres and production in 2022. Problem is higher corn and soybean prices will also compete for acres. US HRW export prices remain a premium to EU, east Europe and Black Sea wheat.
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