Going into the Future.Corn and Soybean.

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The Corn and Soybean markets are currently digesting a number of competing variables pushing and pulling on prices. One the one hand, weather-related harvest delays, continued favorable weekly export numbers, and positive trade developments (NAFTA/USMCA) are supporting prices. But persistent talk of a record new crop, surprise USDA old crop findings, and a strengthening U. S. Dollar have combined to keep a lid on prices. Adding to this mix of market forces will be the release this Thursday of the USDA October Crop Production and WSADE ending stocks numbers.

Following the larger-than-expected numbers in the USDA’s September release, particularly in Corn, market watchers are paying close attention to this next round of projections. The USDA’s National Agriculture Statistics Service (NASS) will furnish its latest figures for U.S. production as of October 1st. Taking their new projected yield per acre paired with their expected harvested acreage will generate updated forecasts for each crop’s total production. In addition, the World Agricultural Supply and Demand Estimates will provide a broader view of world production. Furthermore, demand estimates of usage and exports will derive projections for carryover supply or ending stocks.

A steady stream of information coming out of the fields and weekly crop progress reports should provide a clearer view of where this season’s crops stand. The trade has estimates in place that have been priced into both markets. However, as evidenced last report, surprises can happen and are sure to move the market.

Soybeans
The new crop November Soybean contract (SX18) had dropped to a season low of 812.25 following the September report, with anticipated clear harvest weather and trade/tariff talk adding to the bearish sentiment. But a rebound ensued, one fed by a technical failure to follow through, good export numbers, and significant rains delaying the harvest. The China trade war rhetoric subsided a bit and the announcement of the trilateral USMCA agreement added further support, as the market mounted a 50-cent recovery.The latest Crop Progress showed 83% dropping leaves and 23% harvested versus the five-year average of 75% and 20% respectively.  Prices have been bolstered by weekly export numbers coming in at or above expectations, and the latest 6-to-10 day forecasts calling for more above normal precipitation. Heading into this week, all eyes will be focused on Thursday’s USDA and WSADE numbers. Private estimates are looking for a slight bump in the yield and production numbers and a rise in ending stocks.




Contract Specs: November Soybeans (SX18)
The latest Crop Progress showed 83% dropping leaves and 23% harvested versus the five-year average of 75% and 20% respectively.  Prices have been bolstered by weekly export numbers coming in at or above expectations, and the latest 6-to-10 day forecasts calling for more above normal precipitation. Heading into this week, all eyes will be focused on Thursday’s USDA and WSADE numbers. Private estimates are looking for a slight bump in the yield and production numbers and a rise in ending stocks.



Contract Specs: November Soybeans (SX18)Corn

The December Corn futures (CZ18) followed a similar path as Soybeans, with a sharp drop to new contract lows after the larger-than-expected September USDA estimate. Good weekly export numbers, wet weather forecasts, and friendly technicals had the same effect on Corn, feeding a 25-cent rebound. The recovery paused to digest the USDA’s surprise release of a higher old crop October 1 stocks number, but shrugged it off and continued to reach pre-September report levels.


CZ18     December Corn         The latest Crop Progress report indicated 86% of the Corn crop rated mature (71% 5-yr. average) and 26% harvested (17% 5-yr. average). Although ahead of schedule, market watchers expect the harvest pace to have slowed with heavy rains delaying fieldwork last week and over the weekend. Weather models point to a continued wet pattern that has raised harvest concerns and supported prices.

With the trade still talking about the larger-than-expected 181.3 Corn yield released in the last report, there is a heightened air of uncertainty going into this report.  Expectations are for a slight increase in the yield and production projections. Carryover is seen up as well, reflecting the better new crop numbers and the surprise bump in old crop stocks.



Contract Specs:   December Corn (CZ18)




Again, the USDA report will be released at 12:00 p.m. ET this Thursday, October 11th. Check your Positions and Order Status pages as significant market movement is possible. Once the market reacts to the new USDA numbers, the main market focus will quickly return to the weather and potential harvest delays.

Trading Calendar: 

First Notice Day    October Live Cattle (LCV18)
Crop Progress will be delayed one day (Tue 10/09) do to Columbus Day.

SALAAM TO ALL. MY MISSION IS CLEAR

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