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Prices as of Closing September 2nd, 2024 – 20:00CDT
In this edition:
Market Actions: Insights on marketing actions to consider.
Harvest Headlines: Today’s crop markets saw minor price fluctuations with no major news driving significant changes.
Corn and Soybean Averages: Prices are starting to catch up to their five-year averages.
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
No new major market action triggers.
Volatility continues to be problematic and is making it very difficult to make market decisions. The volatility seems as though it is likely to continue.
Our artificial intelligence (AI) models are showing to be accurate – high volatility with corn, soybean, and wheat prices gradually climbing.
Corn has been bouncing between 390-400 for a few weeks. If t can get above the 415 resistance area, we could see a strong rally, perhaps 430-435 range. We could also see corn slip back down towards 370 if it closes below the 386 support level.
Harvest Headlines
It has been almost five weeks since the corn market ended the week on a positive note, with December corn showing a bullish reversal on the weekly chart. Increased demand, the approach of First Notice Day, and the month's end probably prompted short-covering.
This week posted an improved technical picture for the corn market with Dec. futures bouncing off a double bottom at 385, and finishing the week with a weekly reversal, trading past last week’s high. The key will be follow-through price action next week to confirm a possible trend change in corn futures.
Argentine producers are planning to decrease their total corn acreage for the 24/25 season by 17.1% compared to last year, driven by concerns over disease and leafhopper infestations that negatively impacted yield potential in their 23/24 corn crop.
The Brazilian government anticipates a 20% year-over-year increase in soybean production for 2024/25 in the southern Brazilian state, with output rising from 18.56 to 22.33 MMT. This growth is expected despite unchanged acreage from the previous season, as yields are projected to improve over last year’s drought-affected crop.
There were only 6 deliveries for soybeans, 35 deliveries for soybean oil, and zero versus meal. Today’s move higher saw November beans close right at 1000 which was key, but prices will need to hold these levels next week.
The wheat complex closed higher across all three classes for the fourth consecutive day, after initially trading lower and rallying off support. Minneapolis contracts led the day’s gains, likely driven by ongoing quality concerns regarding the spring wheat crop. Matif wheat, which notched its fifth consecutive higher close, also provided support to the US wheat market.
All wheat export commitments have been taken to 10.023 MMT including products, which is 45% of the USDA forecast total for 2024/25 sales and lagging the 47% average pace. Total shipments from the FAS data are now 4.999 MMT, or 22% of USDA’s number and behind the 24% average.
Russia wheat production estimate is pegged at 82.5 MMT according to the latest SovEcon release, down 0.8 MMT from the previous estimate.
Seasonal Charts
Soybean futures have surpassed the five-year averages and corn is catching up to its five-year averages.
Corn Nov 24 (XBX24)
Soybeans Nov 24 (ZSX24)
Extended Commentary
As we enter the first week of September, the grain markets are showing signs of steadying, with corn and soybean prices starting to align with their five-year averages. The market remains volatile, but the recent price action suggests a possible shift, particularly in the corn market, where technical indicators are beginning to paint a more positive picture.
Corn has been hovering between the 390-400 range for several weeks, but with December futures bouncing off a double bottom at 385 and ending the week with a bullish reversal, there is potential for a rally if prices can push past the 415 resistance area. However, the market remains on edge, and a slip below the 386 support level could send prices back toward 370.
The soybean market also saw some positive movement, with November beans closing at 1000. This is a crucial level to watch as we move into next week, where holding these gains will be crucial for maintaining upward momentum. Despite only a small number of deliveries for soybeans, the overall market sentiment appears cautiously optimistic, supported by solid technicals.
The wheat complex has continued its upward trend, closing higher across all three classes for the fourth consecutive day. The ongoing quality concerns regarding the spring wheat crop, particularly in Minneapolis contracts, have helped to lift prices, along with support from Matif wheat's consecutive gains.
Looking ahead, the market's focus will likely remain on these technical levels and the follow-through price action next week. If the corn market can sustain its recent gains, we may see a broader trend change that could bring some much-needed relief to producers. At the same time, the global outlook continues to evolve, with Argentina's planned decrease in corn acreage and Brazil's anticipated increase in soybean production adding further layers of complexity to the market.
As always, staying informed and ready to act as the market presents new opportunities and challenges is essential. The coming weeks will be critical in determining whether this recent stability can translate into a more sustained rally or if volatility will continue to dominate the landscape.
