MarketEdge AM Comments
Aug 11, 2023
(Phil Knuth)
Good Morning. It is Report Day. At 11am, USDA will release the August WASDE Report. Overnight, corn and soybean futures were mixed. September corn finished the overnight session off ¾ of a penny, settling at 4.8250. November soybeans were up 4 ½ cents, settling at 13.2275. In the outside markets, as of 7:40am: The US Dollar Index is off 70 points, trading at 102.457. September crude oil is up 32 cents, trading at $83.14 per barrel. Precious metals are higher, except silver. Industrial metals are lower, except aluminum. The Electronic Mini-DJIA is unchanged, trading at 35,251. Traders will focus primarily on adjustments to USDA’s corn and soybean yield estimates today. The range of trade estimates for the national average corn yield figure is wide, 172.4bp-178bpa. Last month’s yield estimate was 177.5bpa. With such a wide range of trade estimates, it’s really anybody’s guess where in that range, or outside of it, USDA will land. Nevertheless, even plugging in the lowest trade guess, 172.4bpa, without changing anything else on the balance sheet, would still result in a rather healthy carryout figure of around 1.8 billion bushels. Soybeans are in a much more precarious situation when it comes to tweaking the yield estimate. Last month’s yield figure, 52bpa, resulted in a tight carryout projection of 267 million bushels. If the national average soybean yield figure is lowered today without reductions on the demand side of the balance sheet, the carryout projection could easily dip below 200 million bushels. This tight of a carryout situation would definitely be cause for demand rationing and would be extremely supportive to soybean futures. Of course, as with any USDA report, it is futile to try to outguess the government. We will all just have to strap in and be prepared for 11am and how the market decides to react to whatever USDA throws at us. Yesterday, the funds bought 1000 contracts of corn, bought 2000 contracts of soybeans, and were net even on wheat. They are now estimated to be net long 675 contracts of corn, net long 79,315 contracts of soybeans, and net short 71,020 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, September corn finds initial support at yesterday’s low, 4.80, followed by the one-month low charted on Monday, 4.76, and then the double-low charted on July 12th and 13th that is also a two-year contract low, 4.74. Initial resistance is at 4.90, Wednesday’s high, followed by last Friday’s high, 4.9350, and then the psychological 5.00 mark. November soybeans find initial support at 13.05, yesterday’s low, followed by the psychological 13.00 level, and then the six-week low charted on Tuesday, 12.8225. Initial resistance is at 13.28, yesterday’s high, followed by 13.50, and then the chart gap from July 31st, 13.7550-13.79. Opening calls are mixed. Following are 24-hour rainfall totals reported by River Valley Coop employees for their respective Coop locations and/or homes:
Have a great Friday and an even better weekend.
Good Morning. It is Report Day. At 11am, USDA will release the August WASDE Report. Overnight, corn and soybean futures were mixed. September corn finished the overnight session off ¾ of a penny, settling at 4.8250. November soybeans were up 4 ½ cents, settling at 13.2275. In the outside markets, as of 7:40am: The US Dollar Index is off 70 points, trading at 102.457. September crude oil is up 32 cents, trading at $83.14 per barrel. Precious metals are higher, except silver. Industrial metals are lower, except aluminum. The Electronic Mini-DJIA is unchanged, trading at 35,251. Traders will focus primarily on adjustments to USDA’s corn and soybean yield estimates today. The range of trade estimates for the national average corn yield figure is wide, 172.4bp-178bpa. Last month’s yield estimate was 177.5bpa. With such a wide range of trade estimates, it’s really anybody’s guess where in that range, or outside of it, USDA will land. Nevertheless, even plugging in the lowest trade guess, 172.4bpa, without changing anything else on the balance sheet, would still result in a rather healthy carryout figure of around 1.8 billion bushels. Soybeans are in a much more precarious situation when it comes to tweaking the yield estimate. Last month’s yield figure, 52bpa, resulted in a tight carryout projection of 267 million bushels. If the national average soybean yield figure is lowered today without reductions on the demand side of the balance sheet, the carryout projection could easily dip below 200 million bushels. This tight of a carryout situation would definitely be cause for demand rationing and would be extremely supportive to soybean futures. Of course, as with any USDA report, it is futile to try to outguess the government. We will all just have to strap in and be prepared for 11am and how the market decides to react to whatever USDA throws at us. Yesterday, the funds bought 1000 contracts of corn, bought 2000 contracts of soybeans, and were net even on wheat. They are now estimated to be net long 675 contracts of corn, net long 79,315 contracts of soybeans, and net short 71,020 contracts of wheat. This afternoon’s CFTC Commitment of Traders Report will show actual managed money positions as of Tuesday. From a chart perspective, September corn finds initial support at yesterday’s low, 4.80, followed by the one-month low charted on Monday, 4.76, and then the double-low charted on July 12th and 13th that is also a two-year contract low, 4.74. Initial resistance is at 4.90, Wednesday’s high, followed by last Friday’s high, 4.9350, and then the psychological 5.00 mark. November soybeans find initial support at 13.05, yesterday’s low, followed by the psychological 13.00 level, and then the six-week low charted on Tuesday, 12.8225. Initial resistance is at 13.28, yesterday’s high, followed by 13.50, and then the chart gap from July 31st, 13.7550-13.79. Opening calls are mixed. Following are 24-hour rainfall totals reported by River Valley Coop employees for their respective Coop locations and/or homes:
| CITY | COUNTY | STATE | RAIN TOTAL |
| WYOMING | JONES | IA | 0.40 |
| MARTELLE | JONES | IA | 0.80 |
| OLIN | JONES | IA | 0.30 |
| LOWDEN | CEDAR | IA | 0.50 |
| DEWITT | CLINTON | IA | 0.20 |
| WALCOTT | SCOTT | IA | 1.20 |
| BLUE GRASS | SCOTT | IA | 1.70 |
| DEER GROVE | WHITESIDE | IL | 0.45 |
| WALNUT | BUREAU | IL | 0.10 |
| GALVA | HENRY | IL | 2.20 |
Have a great Friday and an even better weekend.