Morning Market Insight
September 5, 2012
Drew Johnson
Grain Marketing Specialist

Trade seems to be waiting and watching for the Sep 12th crop report.

As of 7:45am Old crop down 4 New crop down 4

Corn is still maintaining strong support around the $8.00 futures mark. Harvest is well underway in the major Corn Belt with disappointing yield reports coming out of the fields. Argentina, the second biggest corn producer in the world, released another 2.75 million tons for export. U.S. exports way down. Only 6.3 million bushels exported versus 24.4 million this time last year. That helped the trade pull off yesterday’s highs. Yesterday’s crop ratings were unchanged at 22 percent good to excellent. We have seen this thing float around the same trading range for over a month. Japan bought some 2013 corn over the long weekend. Would they be doing that if they thought next year’s corn was going to be $4? That brings to attention the increasing concerns that corn supplies, globally, could be tight. Look to see corn lacking strength, today, with the news of weak exports.

Soybeans

As of 7:45am Old crop down 7 New crop down 7
Soybeans are the leader. Harvest is very well underway with disappointing yields coming out of the fields as well. Privates estimate yield at 34.7 bushels well below the USDA’s prediction of 36.1 bushel. This makes it very hard to retain 12 mmt of supply, the minimum needed from Sep to Feb, of soybeans for the western hemisphere. Yesterday’s crop ratings were also unchanged at 30 percent good to excellent. Technically this market is strong, and with high demand, this market has to push higher to curb it.

Wheat

As of 7:45am Spr. Wheat down 6 Win. Wheat down 4
Dryness persists in the HRW belt which is making it hard to plant. Russia stating that they will not be putting restrictions on exports. Egypt bought some 365,000 tons of Russian wheat. Despite “snug” wheat stocks outside US/China/India models suggest values are fully if not overvalued. This market, like the corn, has become sideways and will need bullish information to start pushing it up. Watch it to continue to follow corn as a feed grain.