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The grain markets are marginally lower across the board this morning. Yesterday, the complex rallied early in the day but sold off to finish towards the lower end of the day’s range. November soybeans took the brunt of the selling, topping out at $17.89 before closing at $17.68 ¼. Corn and wheat have proven to be "sell rally" markets during the past several sessions. The December wheat contract has been unable to hold a rally above $9.00 despite some bullish news out of Russia and Australia. Spread action was the key feature of yesterday’s trade. The Nov12 – Nov13 soybean spread finished the daily sharply lower and nearly 35 cents removed from the day’s highs. Most corn spreads finished lower and well removed from their highs as well. Fresh news is lacking this week.
Corn ratings were mostly unchanged on yesterday’s Crop Progress report from the USDA. The crop is rated 22% good-excellent and 52% poor-very poor, both unchanged from last week. Corn harvest is 10% complete vs. 3% on average. Soybeans are rated 30% good-excellent, unchanged from last week. The bean crop is rated 37% poor-very poor vs. 38% last week. Spring wheat harvest is now 95% complete vs. 89% last week. Heavy rains from Hurricane Isaac may have slowed harvest progress in some areas; however the rains were soaked up very quickly in most areas.
Another round of private production estimates will begin this week. FC Stone will release estimates for corn and soybean production today; Informa will release their numbers on Friday. Yesterday, well respected agronomist Cordonnier estimated the US corn crop at 9.8bil/bu. Dr. Cordonnier estimated the soybean crop at 2.52bil/bu.
Outside markets are mostly mixed this morning. Crude oil is 30 cents lower, now trading near $95. The US$ is higher with equities lower. The macro trade is awaiting the European Central Bank’s Thursday meeting in which Draghi may announce another spree of bond buying. Bernanke’s speech at Jackson Hole on Friday was seen as slightly positive for stock market. Unemployment will be released Friday morning. Nonfarm payrolls are expected to rise 125,000; unemployment expected to remain steady at 8.3%.
We look for a choppy trade today with no directional bias. Although the markets feel as if a correction may be in order for corn and wheat, soybeans continue to grind their path higher. The beans have emerged as the true bull market within the complex. Harvest results continue to pour in, and are variable at best. We’re finally starting to hear some good yields from places in Central IL and Southern MN. Next Wednesday’s Crop Production report from the USDA will be the next potential market-moving event.