Macro markets drove the bus this week.  The financial meltdown that started late last week saw the most dramatic drop on Monday, pulling the commodity sector along for the ride.  In some instances, commodities will benefit from investors pulling money from the financial markets due to a sense of relative safety.  No such luck this week.  Why?  It all goes back to China and the economic power.  Economic trouble in China led to fear of reduced grain imports from the U.S. especially in the soybean arena.  As a result soybeans took the brunt of the bearish fundamental blow early in the week. However, once the financial markets began to stabilize, so did the grains and soy complex.  For the week, December corn was down just over two cents while November beans managed to lose just four cents.

Through all the board volatility basis remained peppy during the week.  Cash movement has remained very slow over the past 30 days which has kept basis supported for the old crop time frame.  Soybeans have enjoyed the most strength with substantial premiums paid to those with trucks and beans ready to roll.  New crop beans have shown some signs of strength as well, despite what many predict to be a near record crop just weeks away.

As we look ahead to the new month, the USDA will release the latest S&D table on September 11.  We should start to see private estimates roll in next week as well as some early harvest results from the Delta… just enough to fuel the yield debate fire for a few more days.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

Markets were mostly influenced by social media this week as the Pro Farmer made their annual trek through the Corn Belt to check crops.  Starting in the east, yields were generally disappointing, but not necessarily unexpected given the early season struggles.  Corn had a more negative bias than the soybeans which was generally reflected in board action for the week.  As the Tour proceeded from West to East, corn was less disappointing, but still somewhat below USDA estimates.  While soybean yields are harder to predict this time of year, pod counts are taken as an indication of potential, with an average estimate released at the end of the week.

After the week of headlines, generally supportive to corn and bearish to soybeans, final yield estimates were released after the close Friday.  At this point Pro Farmer is estimating national corn yield at 164.3 bpa, 4.5 bpa below the most recent USDA figure.  National soybean yield was estimated at 46.5 bpa by Pro Farmer compared to 46.9 by the USDA.

When it was all said and done, corn closed marginally higher on the week but soybeans couldn’t brush off the negative headlines, closing down $0.26 on the week.  Now that we have the Tour out of the way, focus will once again shift to USDA yields and balance sheet gymnastics.  Believe it or not, harvest is really just a few weeks away and had progress moves north, we will get a better handle on reality.  Until then, look for sideways trade with slightly higher bias in corn due to lower yield estimates.  Soybeans look have much more downside risk than upside potential moving forward.

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CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.

You may have noticed fireworks in the commodities markets this week.  No, it wasn’t delayed Independence Day celebrations.  It was just another USDA report.  What was projected to be benign Supply & Demand and Crop Production reports turned out to be shockers, to say the least.  Much of the market news this summer has been dominated by the wet start to Eastern Corn Belt corn and soybeans and how tough conditions looked as a result.  The Feds didn’t buy into the negativity.  Estimated national corn yield was raised 2.0 bushels per acre to 168.8.  This was 4.3 bpa higher than the average trade guess heading into the 11:00 report.  The estimated national bean yield was increased a relatively mild 0.9 bpa to 46.9 against average estimates of 44.7.  Some will argue that conditions improved throughout July making the increased yield projections warranted.  Maybe so for corn, but traditional wisdom says beans are made in August, not July.  Weather will be a big driver for beans going forward.

At the end of the week, corn lost just $0.08, after trading in a wild $0.44 1/2 range.  Soybeans lost $0.47 inside a volatile $0.95 range.  For the time being, we will likely trade the numbers as printed, but debate will rage on until we see solid harvest, which is still over a month away.

In the face of all the futures volatility, basis has remained mostly steady.  The big carries from old to new crop corn are still present, but shrinking slowly.  Soybeans are in high demand and tight supply which has processors paying pushes to keep the pipeline charged.

Read Full Market Update

CHS – Rochester Grain Team
Kasson: 507-634-7545 ext 7
Ostrander: 507-657-2234

This Material has been prepared by a sales or trading employee or agent of CHS Rochester and should be considered a solicitation.  The information contained in this presentation is taken from sources which we believe to be reliable, but is not guaranteed by us as to accuracy or completeness and is sent to you for information purposes only.  There is a risk of loss when trading commodity futures and options.  CHS Rochester bases its recommendations solely on the judgment of CHS Rochester personnel.