Grain markets are all trading lower again on Thursday.
Grains Lower for the Month
Craig Turner, grain and oilseed analyst with StoneX says its the last trading day of the month and corn, soybeans and wheat are all poised to have bearish monthly lower closes.
The funds have continued to sell in the grain complex and that pressure accelerated this week.
In the case of corn and soybeans he says the markets are trying to figure out how much above trend line the yields are with continued non-threatening weather in the forecast.
“There have been estimates on corn from 182 up to 187 bushels,” he says.
How Much Lower Will Corn Fall to Price in Higher Yields?
Turner says December corn futures may need to fall to below $4 to price the larger crop in and last year’s low of $3.85 is also vulnerable as it looks like the crop will be even bigger than in 2024.
Seasonals are usually weaker in August for corn as well without dry weather in the forecast he says.
Farmers also have to make room for the new crop and by the end of August generally have to price their basis fixed and deferred pricing contracts with elevators, which also can create pressure.
So far the higher yields are trumping strong demand with weekly exports at 13.4 million bushels old crop and 74.5 million bushels new crop.
Flash export sales on new crop corn were also announced with 3.9 million bushels to Columbia, 5.5 million bushels to South Korea and 5.35 million to unknown destinations.
Soybean See Pressure From Supply and Demand
Turner says the market is talking about a 53 bushel soybean yield, which is not overly burdensome.
However, soybeans have another problem, which is demand concerns.
“China still hasn’t purchased any new crop soybeans from the U.S. and looks content to buy South American beans. It’s best for China to forego buying soybeans to use as a bargaining chip until a tariff deal is worked out with the U.S.” he says.
How Low Could Soybeans Fall?
He says now that November soybeans have taken out the $10 mark they could fall to the $9.60 lows posted earlier in the year.
That is unless there is some export demand, in particular from China, to hit the market.
Funds Have No Reason to Buy Grains
Turner says so far the managed money traders have had no reason to buy grains with ample supplies and mostly favorable weather.
He says that may change in the future if lower prices uncover big demand or result in lower acreage.
“When that happens we could put in a multi-year low, but that may take a while,” he adds.
Grain Markets Ignore Trade Frameworks and Tariffs Looking for Sales
So far the grain markets have been immune to tariffs, but also to announced trade frameworks from countries like South Korea and Japan.
Turner says the deals so far have had very few details on ag purchases and so the market is waiting for proof of actual sales before moving higher.
Wheat Struggles with Corn and Soybeans
Wheat has continued to struggle with the pressure in corn and soybeans and a higher dollar.
Turner says 80% of the world’s wheat resides in the Northern Hemisphere and so wheat is being harvested and put on the market all over the world.
Export sales on wheat have been solid and were at 21.8 million bushels old/ 1.4 million bushels new on Thursday.
USDA also reported a sale of 3.7 million bushels of hard red winter wheat to Nigeria.
