For the week, December corn gained 7 cents, November soybeans were up 1 1/4 cents, December hard red winter wheat tacked on 22 1/2 cents, December soft red winter wheat soared nearly 28 cents higher and hard red spring wheat was up 18 1/4 cents.
The grain markets all posted higher weekly closes again this week after a neutral to slightly friendly September WASDE.
The trade breathed a sigh of relief as USDA left soybean yields unchanged at 53.2 bushels per acre and lowered new crop ending stocks by 10 million bushels to 550 million.
Alan Brugler, A&N Economics, says: “I think the market was pleased that it didn’t get worse. You had sort of a buy the rumor, sell the fact reaction to that report. Those were modest changes on USDA’s part for soybeans and there’s some legitimate questions with the dry finish to the growing season going into harvest that USDA might have to back off on yields slightly.”
Soybeans had a positive reaction to the report but closed lower on Friday as the market continues to run into chart resistance.
“We have multiple layers of resistance because after a multi-month selloff you have technical barriers,” he explains.
Brugler is optimistic the market will eventually breakthrough those chart areas, but even after four higher weekly closes he says it may be too early to call the low in soybeans.
Corn saw additional buying on Friday after a positive close Thursday in reaction to lower ending stocks in the USDA report and with help from higher wheat.
While USDA raised yield .5 bushels to a record 183.6 in the report, Brugler says the agency ultimately lowered ending stocks by 55 million bushels on old crop and 16 million bushels on new crop to 2.057 billion as a result of higher exports.
“I think there is realization that the inventory could get a little tighter over time and while USDA did raise their yield there’s some question in the trader whether that’s going to be there by January or not. Yes, the crop condition ratings right now would say we could be at 183 to 185 but you could also add that with the dryness and lower ear counts that kernel fill will be impaired,” he adds.
While corn posted the third higher weekly close, again Brugler doesn’t think the market has had enough of a rally to confirm an early harvest low is in.
“And we don’t want a big rally yet while South America is planting because it will entice more acres which we don’t need,” he explains.
Wheat closed sharply higher Friday with help from a lower dollar and despite USDA leaving ending stocks unchanged in the report at 582 million bushels.
Brugler says seasonally wheat is the one market that is trying to forge a low and generally does so before corn and soybeans.
“Certainly there is a tendency to bottom that market in late August or the September time period and I do like the technical action in Chicago wheat,” he says.
Chicago wheat spiked the August low, which was the lowest level since 2020, and reversed.
However, Brugler says there is also fundamental justification for the wheat market moving higher.
“The weak dollar that you mention is a factor, we’ve been down five weeks in a row here and the weaker dollar does tend to help exports and then we have a tighter supply situation developing for 2025 if you look at the world number. You’re seeing Russian production numbers drop, as well as the Southern part of Europe over into Ukraine,” he states.
