Rose on Grain – CME Corn and Wheat Finish Higher on Week, Soybeans Effectively Unchanged

September 20, 2021 8:10 am
Published by

Louis W. Rose IV

Corn:

CME Dec corn futures gained 9¾ cents last week to finish at 527¼.  We did not recommend trading any bias for corn, soybeans, or wheat last week.

The corn market finished modestly higher on higher USDA on quickening US export data, higher private acreage estimates Vs USDA and logistical issues with shipments at the Gulf of Mexico.  Seasonality and impending harvest pressure likely held the market in check.

Domestically, the US harvest, outside of the southern states where yield reports have been mostly strong, is underway.  However, rain and showers seem likely to hinder many harvest efforts this week across the upper Midwest.

Net export sales were higher while shipments were lower Vs the previous sales period at approximately 10K and 8M bu, respectively.  Both sales and shipments were well off the pace required to meet the USDA’s latest projection.  The US is 39% committed and 1% shipped Vs the USDA’s target.  2021/22 sales were quicker at around 27M bu.  Sales are well ahead the average expected pace for this point of the season. 

Internationally, NOAA continues to predict a significant probability for La Nina development across South America during the upcoming growing season, which should offer some support to corn and bean markets over the near-term.  Traders will continue to watch weather reports as the early planting season across Brazil approaches.

CFTC Commitments of Traders data for the week ending Sept 14 (futures only) showed that the trade trimmed its net short position to approximately 2.24B bu; large specs trimmed their net long to around 989M bu. 

For an in-depth analysis of CFTC data see our weekly COT analysis and commentary.

For this week, the weekly technical analysis for and money flow into the Dec contract remain bearish, with the market also remaining somewhat oversold.  Weather and harvest reports will likely be major market moving factors over the near-term for corn, beans, and wheat.  Increasing harvest pressure is imminent for the corn and soybean markets.

Soybeans:

CME Nov soybeans lost 2½ cents last week to finish at 1284.

CME soybeans finished near unchanged on strengthening US export data, but issues with export shipments likely offset any bullish sentiment.  As with corn, private estimates of planted area are mostly higher Vs USDA, which, along with impending harvest pressure and seasonality, likely limited upward movement.  Strong NOPA crush data likely lent support to the market.

Domestically, harvest of the US crop is underway, with early yield reports better than expected.  But, as with corn, harvest across the upper Midwest will likely be hindered by rain and showers this week.  Yields across most of the southern US continue to be mostly strong and, in general, better than originally expected.  NOPA crush for Aug was almost 159M bu, well above the higher end of pre-report expectations.

Net export sales were higher Vs the previous assay period while shipments were lower at approximately 46M and 9M bu, respectively.  Shipments again fell short of the pace required to hit the USDA’s latest projection.  The US is 39% committed and less than 1% shipped Vs the USDA’s target.  Sales are well ahead the average expected pace for this point of the season. 

Internationally, issues with logistics have prompted China to ramp up its buying from Brazil.  Elsewhere, an expected increase in Ukrainian production could allow competition with the US crop.

CFTC Commitments of Traders data for the week ending Sept 14 (futures only) showed that the trade reduced its aggregate net short position to approximately 711M bu; large specs reduced their net long to around 252M bu.

For this week, the weekly technical analysis for and money flow into the Nov contract remains bearish, with the market also remaining somewhat oversold.

CME Wheat:

CME SRW Dec futures gained 20¼ cents last week to settle at 708¾.

CME futures moved higher sympathy with corn, quickening US export sales data, and a poor US harvest of spring wheat.

Domestically, current wheat and soybean prices have many US cotton producers considering more acreage to the double crop rotation this fall.  Private estimates of planted area continue to come in higher Vs USDA.

Net export sales and shipments higher Vs the previous assay period at approximately 23M and 19M bu, respectively.  Both sales and shipments were ahead of the average weekly pace required to meet the USDA’s official target.  The US is 44% committed and 27% shipped Vs the USDA target.  Sales are ahead of the average long-term pace for this point of the season while shipments are off their expected pace.

Internationally, Ukraine’s wheat production is expected to be significantly higher this season.  Australia is looking at harvesting another very large crop this season.

CFTC Commitments of Traders data for the week ending Sept 14 (futures only) showed that the trade increased its aggregate net short position to approximately 378M bu while large specs flipped their net long to a net short of almost 51M bu.

For this week, the weekly technical analysis for and money flow into the Dec contract has stabilized and turned neutral to supportive.  The 650, 625, and 600 levels are downside targets with 750, 775, and 800 likely to evince significant to strong resistance.

Have a great week!

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    This post was written by Louis Rose