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Prices as of September 10th, 2024 – 20:00CDT
9/11 – Never Forget!
In this edition:
Harvest Headlines: Corn and soybeans slide, while wheat gain a little after.
Market Actions: The one-week technical analysis of corn is strongly bearish.
One Week Soybean Technical Analysis: Wheat is still bearish but leveling off and dovetailing with our AI fundamental models’ predictions of prices leveling off and then slowly creeping up.
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.
Harvest Headlines
Grain markets saw mixed activity, with corn and soybeans under pressure from bearish forces, while wheat showed some resilience. Weather concerns and uncertain demand continue to influence price movements, and attention is turning to key upcoming reports, particularly the USDA’s September WASDE.
Corn
Rising harvest pressure and logistical challenges prompted sellers to return to the corn market today. Although wheat futures saw an uptick, significant selling pressure in the soybean market helped cap any possible gains in corn futures.
US export price competitive vs Soth America and Ukraine. Steep drop In China domestic corn price could limit their imports. Brazil and Argentina farmers are waiting for rain to start planting
Corn prices remain pressured, dropping to contract lows amid weak demand and export competition.
USDA projects corn prices at $4.40 per bushel for 2024, a decline from 2023.
Pro Farmer’s yield estimate of 181.1 bushels per acre provided only brief support.
Weak ethanol margins are also weighing on corn demand, further pressuring prices.
Tropical Storm Francine's rains could ease dry conditions but are likely too late to improve yields.
Diminished export interest, particularly from China, remains a bearish factor.
Soybeans
Soybeans ended the day sharply lower, taking out all of yesterday’s gains as pressure from crude oil and a Crop Progress report that showed high crop ratings pressured the market. Both soybean meal and oil were sharply lower as well with soybean oil in particular taking a bigger hit due to the drop in crude.
Yesterday afternoon, the USDA published its Crop Progress report, revealing that the good-to-excellent ratings for soybeans remained steady at 65%, unchanged from the previous week. The market had anticipated a 2-point drop to 63% due to the recent dry spell. Additionally, 25% of the soybean crop was reported to be dropping leaves, up from 13% a week earlier and above the 5-year average of 21%.
Soybean prices closed higher by 13¢ on short covering, but the market remains cautious.
Brazil is facing delays in planting due to dry weather, potentially reducing yield projections if the rains don’t arrive soon.
Chinese investigations into Canadian canola imports could benefit U.S. soybeans by redirecting demand.
The USDA's upcoming report is expected to show bearish production figures, maintaining pressure on prices.
Soybean open interest has seen a notable drop, reflecting ongoing liquidation.
Wheat
All three wheat classes posted gains, even as corn closed lower and soybeans declined sharply. Crude oil also saw a significant drop after OPEC cut its demand forecast for the second consecutive month. However, wheat managed to defy this negative sentiment, likely supported by reports of lower Russian yields and anticipation of a possible Fed rate cut next week, which could weaken the US Dollar. Additionally, some short covering may be occurring ahead of Thursday’s WASDE report.
Wheat futures experienced mixed movements, with Chicago wheat slightly up, while Kansas City and Minneapolis wheat declined.
Export competition and strong U.S. dollar continue to hamper U.S. wheat exports.
Chicago wheat futures saw new contract lows as global supply remains robust.
Domestic wheat receipts have been in decline, pointing to weaker market fundamentals.
The market is awaiting further insights from the USDA’s Crop Production Report, which could influence future pricing.
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; corn, soybean, and wheat prices gradually climbing. See models below.
Wheat
Weekly Technical Analysis 9/11/2024
This analysis presents a composite analysis that we have developed to evaluate technical indicators. We have back tested this model with thousands of scenarios. The back testing has proven the model to be accurate 65.6% of the time. This is significantly better than other technical analysis techniques. This is a weekly analysis that analyzes if there are any changes in trends.
The near-term wheat outlook is bearish. Consider trading only short positions (for sale) as long as the price remains well below 631.25 USD. The next support located at 549.00 USD is the next bearish objective to target. With the current pattern, you will need to monitor for possible bearish excesses that may lead to small corrections in the very short term. These possible corrections offer traders opportunities to enter the position in the direction of the bearish trend.
The force of this analysis is 6.1, which is strong but not at level 8 or above. Wheat has been on a downward trend, but that trend seems to be leveling off. This aligns with out AI fundamental models that suggest that wheat are going to be volatile but will level off and gradually increase. Keep an eye on the $631.15 and $549 resistance levels. Hopefully, we will push the $1631.25 level, which could send soybeans on a long-term bullish run.
Extended Commentary
As we move deeper into September, the grain markets remain volatile, with mixed results across critical commodities. Corn and soybeans faced further downward pressure, while wheat showed some resilience, posting modest gains despite the broader bearish sentiment. Traders are closely watching weather patterns, export demand, and upcoming USDA reports, which will heavily influence market movements in the coming weeks.
Corn prices continue to feel the weight of rising harvest pressure and ongoing export competition from Brazil and Argentina. While weather concerns in the U.S. Corn Belt persist, particularly in drought-affected regions like Nebraska and South Dakota, the market struggles to find support amid weak ethanol margins and diminishing export interest, especially from China. Recent yield estimates, such as Pro Farmer’s projection of 181.1 bushels per acre, have provided temporary relief, as logistical challenges and a lack of demand keep prices near contract lows.
Soybeans also experienced a sharp drop today, erasing gains made earlier in the week. A combination of steady crop conditions, as reported by the USDA’s latest Crop Progress report, and pressure from declining crude oil prices contributed to the weakness in the soybean market. Additionally, China’s uncertain demand for U.S. soybeans continues to weigh on prices, although Brazil’s planting delays could provide some future support if dry weather persists. Traders are also preparing for bearish production figures in the upcoming USDA report, which may keep pressure on soybean prices in the near term.
Wheat futures were the bright spot in today’s markets, managing to eke out some gains despite the general negative sentiment. Wheat prices have been supported by lower Russian yields and the anticipation of a potential Fed rate cut, which could weaken the U.S. dollar and boost U.S. wheat exports. However, export competition remains fierce, and the market still grapples with global solid supply. The upcoming WASDE report will be crucial in determining the next steps for wheat, with traders eagerly awaiting new data on production and demand.
As volatility continues to dominate the grain markets, our AI models predict gradual price increases for corn, soybeans, and wheat, although short-term bearish trends remain. Wheat, in particular, is showing signs of leveling off after a prolonged downtrend, aligning with our technical analysis. Keeping an eye on crucial support and resistance levels will be critical for navigating the uncertain market landscape in the weeks ahead.
