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It seems like crop prices are stuck at the bottom and are fighting to gain traction. It feels like when you have the tractor stuck on a wet spring day and are rocking it back forth to try to gain traction. It is not a fun place to be, but it could be worse. Prices could be as stuck as Norm is here. It took two semi-wreckers and a Cat D8 dozer to get him out. The good thing is the crop prices don’t need nearly that much help to get out!
In this edition:
Market Actions: Insights on marketing actions to consider.
Harvest Headlines: Today's headlines present a mixed bag for grain markets, but the overall trend is pushing crop prices higher.
AI Models: Our advanced artificial intelligence (AI) predictor models suggest prices are going to steadily climb.
The information provided in this newsletter is for informational purposes only and should not be considered financial advice. We recommend consulting with a commodities broker and financial advisor before making any commodities decisions.
Market Actions
Crop prices are starting to head in the right direction. We still have a way to go, but the data is suggesting that prices are on their way up. All our artificial intelligence price prediction models are showing that prices will be going up over the next few months (see AI models at the end of the newsletter).
Due to volatility, a lot of experts are recommending selling all 2023 bushels, most of 2024, and even 50-75% of 2025 bushels. If you are selling far ahead, you might want to look at some put options as well as the money strike prices.
Technical indicators are still mixed. The moving averages are still almost all suggesting sell, while the average of the 11 oscillators is giving a neutral signal (see chart below). Unfortunately, volatility looks like it is going to remain very high for the foreseeable future. high.
Harvest Headlines
The grain market kicked off the week with a generally positive tone, despite some mixed results. Corn and soybean prices led the charge, each climbing approximately 2% due to technical buying and short-covering. These actions were prompted by forecasts predicting drier weather conditions. Kansas City hard red winter wheat also saw modest gains. However, Chicago soft red winter wheat and Minneapolis spring wheat contracts experienced slight declines. Overall, the market's reaction to the weather outlook created opportunities for price increases in several key grain commodities.
Chinese customs reported July corn imports at 1.09 MMT, down 35% from last July, with cumulative Jan-July corn imports of 12.13 MMT down 11.5% from last season’s pace. July wheat imports of 800k tons were up 13% YoY, with Jan-July wheat imports of 10.08 MMT still up 15.6% vs 2023.Chicago soybean futures ticked down on falling soy oil prices and technical trading, while corn futures eased on expectations for a record U.S. corn crop as well as strength in the U.S. dollar which can make U.S. exports less competitive.
Friday afternoon’s Disaggregated CFTC Report showed managed money funds making mostly minor net moves across the grain complex on the week ending last Tuesday (8/13), save for meal where they liquidated over 39k net contracts. A larger net move than –4.2k net was seen in corn, while daily trade estimates had beans moving to a new record net short, instead of regaining 2k net there according to the CFTC. Producers and merchants added 16.1k net corn, 12.8k net beans, and 33.9k net meal on the week to Aug 13.
Soybean export inspections showed 398,233 MT (14.63 mbu) shipped during the week that ended on August 15. That was a 13.9% improvement on the week and 24.3% larger vs. last year. The top destination was Germany at 130,571 MT, with 60,497 MT headed to Egypt, as just 56,765 MT on its way to China. Accumulated shipments have totaled 43.78 MMT (1.609 bbu), which is 13.6% below the same period last year.
Crude Oil prices trended lower last week after initially hitting a three-week high due to geopolitical tensions between Iran and Israel. The market settled at $75.54, down slightly on the week, as tensions eased and renewed Gaza peace talks emerged. Current prices are testing major support levels, with the potential for a deeper pullback if prices close below the $74.52-74.71 range.
AI Models
for CME Corn, Soybeans, and Wheat
Our AI models ingest and process billions of data points to create models that have accuracy of 95%+. Our models are as accurate as any model you can find. Just like with any model, they are not always completely accurate, especially in times of high volatility. The models are designed to be a bit of information that can help inform you marketing decisions.
AI Model: Corn 90 Day Prediction
AI Model: Soybean 90 Day Prediction
AI Model: Wheat 90 Day Prediction
Extended Commentary
As we find ourselves amid another challenging season, the recent shifts in crop prices provide a glimmer of hope. While prices have been stuck in a rut, much like a tractor bogged down in wet spring fields, there are signs that the market is gaining some traction. The overall trend is finally pointing upward, and our AI models are backing up this optimism with predictions of steady price increases over the coming months.
The recent rise in corn and soybean prices, driven by drier weather forecasts and technical buying, is a welcome development. Even with some mixed results in the wheat markets, the overall tone has been positive, making us cautiously optimistic about the near future. The volatility that has plagued the market is still a factor, but the signs of recovery suggest we may not be stuck for much longer.
However, with this optimism comes the need for strategic planning. Given the ongoing uncertainty, experts continue to recommend selling a significant portion of your 2023, 2024, and even 2025 bushels. While prices show signs of life, the mixed signals from technical indicators and the high volatility suggest that caution is still warranted.
Global factors such as Chinese corn imports and crude oil prices continue to influence the broader market. The dip in Chinese corn imports and the easing of geopolitical tensions affecting crude oil prices are reminders of how interconnected our markets are and how external factors can quickly shift the landscape.
As you move forward, closely monitor market trends and external factors. The information we’ve provided and insights from our AI models should help guide your decisions in these still-uncertain times. The road ahead may be bumpy, but with careful planning and patience, there’s hope that we’ll soon see prices back on solid ground.
