- Chicago markets are all trading towards the close in the red as crude oil sheds as much as $1.30/barrel and the US$ rallies further; other news is remarkably absent. December corn is once again below its 20 day moving average, wheat is faltering having made monthly highs last week, and November soybeans are solidly below the 50 day moving average.
- The September Grain Stocks Report was considered bullish for soybeans as stocks came in at 301 million bu, well below expectations and down 44 million from the September supply and demand report. Last year’s production was revised lower by 10.6 million bu and demand was posted higher from both crush and exports. A 1 bu/acre yield cut in the USDA October report would equate to end stocks of 339 million bu, and a 2 bu/acre cut would see that figure at 249 million bu. There are some who anticipate yields starting to drop off as harvest progresses and later planted beans, which saw a dry finish to their growing period, are harvested. If this situation materialises we could well see traders’ mindset change and thoughts moving away from ample supplies to tight supplies.
- Corn figures in the report were also considered bullish compared with trade estimates as September 1st stocks were reported at 2.295 billion bu compared with the average trade estimate of 2.346 billion. With the market currently very oversold and prices cheap enough to support better demand we see downside as extremely tough to substantiate.
- Wheat data was deemed just about bearish compared with trade estimates, wheat stocks came in at 2.253 billion bu vs. average estimates of 2.203 billion.
- Our view remains that market lows were scored in late August yet there is currently insufficient bullish or bearish information to substantiate a definitive trend either higher or lower. The October USDA crop report is only just around the corner, and last week’s stocks report has added a degree of pressure on US soybean yield of 48 bushels/acre plus to keep stock levels from dipping below 400 million bu. Watch this space is our thought!