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In this edition:
Harvest Headlines: USDA data sends markets both up and down.
Market Actions: No new market triggers. An unexpected drop in projected supply or a rise in demand could prompt managed funds to cover more of their large short positions, driving prices higher. However, a sustained rally for corn, soybeans, or wheat is unlikely to occur before the harvest is completed.
AI Forecast: Our artificial intelligence model shows prices of corn, soybeans, and wheat will stay steady for the next four weeks
Market Overview
The USDA reports influenced grain market movements, resulting in a mixed day for major commodities. Corn and wheat showed gains, buoyed by lower-than-expected stock data, while soybeans closed lower after market reactions to increased inventory. Traders adjusted positions as they evaluated global production and domestic demand patterns.
Prices as of September 30th, 2024 – 20:00CDT
Harvest Headlines
Corn Market Highlights:
The corn market responded to the lower-than-anticipated Quarterly Grain Stocks report by gaining momentum at the start of the week. December corn closed at 426 ¾ today, marking the highest close since late June. This upward movement could drive prices higher, potentially challenging the next significant resistance level at the 100-day moving average around 429.
The USDA's Quarterly Grain Stocks report revealed that U.S. corn supplies as of September 1 totaled 1.760 billion bushels, falling 84 million bushels short of pre-report estimates. This total reflects strong Q4 usage and a slight decrease in last year's production by 1.08 million bushels.
Higher-than-expected domestic feed use supports prices.
USDA revises downward its yield estimates for 2024, lifting futures.
Ethanol demand continues steady, providing support.
Brazil's safrinha crop competes with U.S. exports, capping gains.
Harvest progress is slightly behind the five-year average.
Soybean Market Highlights:
Today's U.S. Quarterly Grain Stocks report showed a decline in corn stocks by 1.08 million bushels, bringing the total to 1.76 billion bushels. This figure was on the lower end of trade expectations and fell short of the average estimate of 1.844 billion bushels. Additionally, there was a minor reduction in 2023/24 crop production. Corn futures reacted positively, with a bullish response to the report.
Higher U.S. production estimates weighed on futures.
Weak Chinese demand amid economic concerns limited buying.
Brazil’s soybean exports continue strong, pressuring U.S. markets.
Dry weather forecasts could impact yields and support prices.
The CFTC report released on Friday indicated that, as of the 24th, funds had repurchased 47,437 soybean contracts, reducing their net short position to 74,978 contracts. Since the 24th, it is estimated that they have exited an additional 20,000 contracts, suggesting they are approaching a net neutral position.
The market anticipates a possible correction after a sharp sell-off.
Wheat Market Highlights:
Wheat prices closed higher, driven by strength in Minneapolis futures. While today's data was neutral to slightly supportive for the wheat market, rising Matif futures helped lift prices. The quarterly stocks number, though slightly above last year's, was close to pre-report expectations, with the trade predicting 1.984 billion bushels and the actual figure coming in at 1.986 billion bushels. Similarly, U.S. all-wheat production for 2024/25 totaled 1.971 billion bushels, higher than last year's 1.812 billion but slightly below the average trade estimate of 1.984 billion bushels.
Drought conditions in Australia support global wheat markets.
Lower-than-expected Canadian harvest lifts U.S. futures.
U.S. export demand has been weak but could rise due to global supply concerns.
Russian wheat exports remain strong, capping U.S. gains.
An estimated 45,000 dockworkers are set to go on strike at midnight (September 30), potentially causing significant disruptions along the U.S. East Coast and Gulf Coast. The strike is expected to impact 36 ports, which handle roughly half of the country's imports and exports, leading to delays in the transport and logistics of U.S. grains and other goods.
Artificial Intelligence One Week Price Predictions
This is the prediction from our main artificial intelligence (A)I model. This model assumes 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
Grain markets saw mixed outcomes after the latest USDA report. Corn futures rose slightly, driven by lower-than-expected stock data, which came in at 1.76 billion bushels, falling short of estimates. Steady ethanol demand and reduced yield expectations further supported prices. However, U.S. exports continue to face competition from Brazil’s safrinha crop, limiting gains. Meanwhile, harvest progress remains behind the five-year average, keeping market participants cautious.
Soybean futures dropped amid higher U.S. production estimates and weak demand from China. Despite strong Brazilian exports weighing on prices, dry weather in key growing regions could impact yields and support future price corrections. The CFTC report also suggests that funds are reducing their short positions, nearing a net neutral stance.
Wheat futures climbed as strength in Minneapolis wheat provided support, though global competition, particularly from Russia, capped gains. Drought conditions in Australia and a smaller-than-expected Canadian harvest also bolstered prices. However, U.S. export demand remains sluggish, and the looming strike among U.S. dockworkers could further disrupt grain logistics.
Looking ahead, traders are closely monitoring harvest progress and global supply trends, with AI models forecasting stable prices for the next few weeks. Uncertainty remains, especially with ongoing geopolitical tensions and potential weather disruptions globally.
