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Prices as of September 3nd, 2024 – 20:00CDT
In this edition:
Market Actions: Insights on marketing actions to consider.
Harvest Headlines: Today’s crop markets saw a nice step up.
Our artificial intelligence model 2 shows prices of corn, soybeans, and wheat will stay steady for the next four weeks.
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.
The recent rally has pushed November soybeans into the resistance zone between 1005 and 1040. A close above this range could pave the way for a move toward the July high of 1083. On the downside, a break below 950 could expose the market to a potential decline toward the 915 to 900 support area.
Harvest Headlines
Today's charts highlight price movements for key new-crop December CBOT corn (CZ) and November soybean (SX) contracts during the first half of September, dating back to 1993. Over the past seven years, CZ has only experienced one double-digit price shift, with crops maturing as harvest approaches. In contrast, the average absolute price move in the seven years prior was more than 30 cents. Soybean contracts (SX) have shown slightly more volatility recently, but the average absolute move over the last nine years remains under 20 cents, compared to over 50 cents in the preceding nine seasons.
Corn
The USDA released its weekly export inspections report this morning. U.S. exporters shipped 38 million bushels (965,000 metric tons) last week, bringing total inspections for the 2023/24 season to 2.049 billion bushels, a 40% increase year-over-year. The USDA had projected a 34% increase, but strong late-season demand has helped boost the total beyond expectations.
The corn market bounced back from overnight lows as buyers increased activity, driven by strong export inspection data and a better technical outlook. This led to covering of short positions, pushing December corn to a new five-week high, following last week’s bullish reversal.
Soybeans
Soybean futures posted 12 to 15 cent gains in the front months on Tuesday to follow soybean meal, as export business continues to trickle in. Soymeal futures were up $7.30 to $8.90/ton across the board. Soy Oil futures were down 74 to 107 points on pressure from crude oil, which fell $4.09/barrel.
Stronger-than-expected soybean export inspections, along with a flash export sale of 4.8 million bushels of new crop soybeans to China, drew buyers back into the soybean market, leading to a higher close after a weaker open. A 2% gain in soybean meal also supported the rally, while soybean oil ended sharply lower but recovered from its lows, influenced by steep declines in both canola and crude oil.
Analysts at Celeres have provided an initial estimate for Brazil's 2024/25 soybean crop at 169.9 million metric tons (MMT), up from 152.0 MMT in 2023/24. Total corn production is expected to reach 134.1 MMT, compared to 129.2 MMT last season. Soybean exports are projected to rise to 107 MMT in 2024/25, up from 97 MMT last year, while corn exports are forecasted at 51 MMT, an increase from 43 MMT in the previous marketing season.
Wheat
The wheat complex rebounded from overnight losses shortly after the day session opened, as buyers reacted to strong export inspections and rising Matif wheat prices, with additional support from gains in corn and soybeans. Concerns in broader markets may have contributed to a risk-off sentiment, providing further support, as managed funds held significant short positions across the grain sector.
Wheat futures came out of the Labor Day holiday with gains across the board. Chicago SRW futures were up 15 to 19 cents in the nearbys. KC HRW was 11 to 14 cents higher in the front months. MPLS spring wheat posted 4 to 8 cent gains on Tuesday.
Crop Progress data from NASS showed 70% of the US cotton crop harvested, in line with the 5-year average. The winter wheat crop was 2% planted by Sunday, even with th normal pace.
Artificial Intelligence Model 2
One Month Price Predictions
This is the prediction from our second AI model. This model assumes less growth in demand as compared to our first model (Model 1 assumes 2.75% growth in demand; Model 2 assumes 1.75% growth in demand). 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 informational and not to be construed as advice.
Corn
Soybeans
Wheat
Extended Commentary
As we enter September, crop prices continue to show incremental improvement, with today’s markets seeing a positive shift. Corn, soybeans, and wheat have all moved higher, supported by solid export inspections and technical factors. The rally in soybeans has pushed November contracts into a critical resistance zone between 1005 and 1040. If prices close above this range, we could see further upward movement toward the July high of 1083. However, any slip below 950 could put pressure on the market, potentially sending it down toward the 915-900 support area.
Corn also saw a boost today, with strong export demand and better technical indicators driving a five-week high in December futures. The market responded well to U.S. export inspections, which exceeded expectations and showed a 40% year-over-year increase. This renewed demand, combined with the closing of short positions, has helped to support the recent gains in corn prices.
Soybeans benefited from stronger-than-expected export inspections and a flash sale to China, which added further momentum to the rally. While soybean oil faced pressure from falling crude oil prices, the strength in soybean meal helped to keep the overall market on an upward trajectory. This combination of export demand and supportive technicals has helped soybeans maintain their recent gains.
The wheat complex also rallied today, driven by strong export inspections and rising global wheat prices. All three wheat classes posted gains, with Chicago SRW leading the way. This rebound followed overnight losses and reflects the broader market’s cautious optimism as buyers stepped in to cover short positions.
Looking ahead, our AI Model 2 suggests that corn, soybeans, and wheat prices will remain steady over the next four weeks, with gradual climbs likely. The key for producers will be to monitor these technical levels closely, as they could signal the potential for further price increases or declines depending on market conditions. As always, volatility remains a factor, so staying informed and ready to act will be crucial in navigating these unpredictable times.
