• HEADLINES: Chicago mixed in slow volume ahead of active harvest weekend; Ukraine corn yields are disappointing.

• Chicago is mixed at midday in thin volume. Short betting traders are expecting pre hedge selling in corn ahead of an active weekend of Midwest harvest. The harvest is fast, but cash connected selling said to be limited, a surprise. Some cash corn is being sold in the Plains/Missouri, but otherwise, producers are storing or filling contracts which has forward cash bids firming. In fact, ethanol plants are starting to become more aggressive in future corn bids with their concern that harvest progress will reach past 50% in early October- and they have not booked their desired volumes. Amid the open/dry forecast, farmers are choosing to just push ahead on corn and then move to soybeans. Some IL and IN farmers will finish their corn harvest next week. Producers continue to report disappointing corn yields. Corn and soybean yield data points to a declining trend, it is a question of degree for the October report.

• Rising energy prices are also in the minds of traders as WTI crude has rallied to near $74.00 on tightening supplies and the coming cold season across the Northern Hemisphere. Coal values are at record prices in China and gas prices are at records in Europe. Comparatively, ethanol/biodiesel appear cheap, and funds are looking at what are the cheapest BTU units that can be purchased.

• It has been a very slow trade in Chicago to date. Funds have bought 2,200 contracts of wheat, 1,800 contracts of corn, and 1,100 contracts of soybeans. In soy products, funds have bought 3,100 contracts of soyoil while selling 1,200 contracts of soymeal. December soyoil is trading above its 20-day moving average with the next target being $0.6009, the 50 day average. Soyoil appears to be rising as being the primary feedstocks in biodiesel.

• It will be interesting to monitor the Chicago close in terms of pre hedging ahead of the harvest weekend. Most traders are positioning for this pre hedge, and if it does not develop, prices could rise on speculative short covering.

• China’s ban on crypto currencies, calling them illegal, no matter whether they are held on or offshore has pummelled the value of Bitcoin by 6% and other digital coins by as much as 8-12%. Although the announcement was only 4 hours ago, the market move has been swift as Chinese investors flee the asset. The fall in digital currencies is slightly bearish on raw material values.

• We would remind that China’s electrical shortages and the taking of several crush producers offline, can easily be made up by others. China has about 40% more crushers than they need which is always a bearish omen for margins. Thus, be careful with trying to determine how much (if any) Chinese soybean imports to reduce via their domestic energy shortage.

• Ukraine corn yields with 4% of the harvest completed are just 77.2 bushels/acre. The early Ukraine corn yield is slightly better than last year, but well below the 115 bushels/acre that the USDA is forecasting for the entire harvest. On average, corn yields rise in Ukraine as the harvest advances, but if yield does not start rising sharply in ensuing weeks, the USDA is overstating the 2021 Ukraine corn crop at 39 million mt with exports at 32 million. Amid the global shortage of feed, the size of the 2021 Ukraine corn crop is of real importance.

• The midday GFS weather forecast is wetter across the E Plains, and drier west compared to the overnight run. This would miss the driest wheat areas of the HRW. Above to much above normal temperatures are forecast to persist into mid-October.

• Low volume into an active harvest weekend is pressuring corn/soybean futures at midday. If the cash related hedge pressure does not surface before the close, a bounce will follow. It is the September Stocks report next week and whether the US Government can stay open which will key longer term direction. This week’s higher close in the “gut slot” of the Midwest harvest is impressive. Wheat/corn are favoured.

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