• HEADLINES: Chicago corn/wheat hold chart-based support, Soybeans stumble on fresh soyoil low; China on holiday for their moon festival next week.

• Chicago futures are lower at midday with corn/wheat futures trying to grab back some of the morning losses. Hedge and speculative sales were noted heading into the first real harvest weekend of the season. December corn and November soybeans returned to test chart-based support which lies under $5.20 and $12.75, respectively. Wheat futures followed on profit taking, but world cash prices did not budge. The world wheat market continues to add premium for tightening supplies of world protein wheat.

• FAS announced that China booked 132,000 mt of US soybeans today. US exporters report that China continues to book US soybeans out of the Gulf and PWN for November realising that elevation space is getting tight on a massive export program. Midwest cash basis will break on the shift from old to new crop supplies, but a basis low should be set in the first third of the harvest. There is plenty of bin space available to tuck the 2021 crop away. China crush margins beyond the next 30 days are deeply positive and China is extremely short bought on nearby needs. Cash sorghum traders advise that China has become interested/active in securing US December-March sorghum.

• China will be on holiday Monday/Tuesday for their Moon Festival. We hear that China is asking Ukraine to pull their corn purchases forward for October export. This may allow China to roll their US corn export slots to soybeans (which China desperately needs). The 12 million mt of known/unknown US corn purchase was to ship by the end of February. Now because of Hurricane Ida and the damage on the Gulf, the completion of those exports could be pushed backwards to March. It is soybeans that China needs for spot or nearby shipment.

• The US$ has rallied early today which sparked speculative Chicago selling. Fund managers continue to closely link the value of the greenback to a host of raw material values. The US$ is back trading at its best level since late August as the Delta Covid variant does not appear to be having a negative impact on the US economy. Will the Fed taper bond purchases by late year.

• Chicago traders estimate that managed money has sold 3,100 contracts of wheat, 5,200 contracts of corn, and 5,900 contracts of soybeans. In soy products, funds have sold 1,000 contracts of soymeal and 4,300 contracts of soyoil.

• Some cash corn is moving in the E Midwest the best sellers being in Indiana and Ohio. The movement is not heavy and cash basis bids are holding steady. We expect that producers will really get at the corn/soybean harvest next week. Producers will deliver against their forward contracts, but with seed moisture falling at least .5% each day and the Midwest weather forecast being open, the 2021 harvest will likely be one of the fastest in recent memory.

• The midday GFS weather forecast is drier than the overnight for much of the Midwest. Expansive high pressure ridging meanders into the heart of the Midwest on the weekend which cuts off precipitation entirely from the Central US. Cooler but still very dry conditions are projected in the 6–10-day period. Harvest rolls along smoothly well into the first week of October. Maximum highs temperatures will range from the 80s and low 90s.

• End users are poorly covered and US corn yield is disappointing on late summer disease pressures (premature death of the plant). The premature death lowers corn test weight. By the end of next week, some 25-30% of the US corn crop will be harvested and a lower yield assumption will be set for the October NASS report. The lower yield raises the importance of the September Stocks report on the 30th . Tightening world protein wheat stocks, the lower corn yield and strengthening US soybean demand from China does not argue for a lasting downtrend. Corn, wheat and soyoil are the best values on any further Chicago break.

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