Chop, chop, dig, dig and now outta the hole. CBOT futures spend the overnight and morning sessions probing support levels, found them solid and then spent rest of the session grinding higher. Corn and soybean futures continue to respect the LONG-TERM upward trending channels. Granted we are at the bottom of these channels and vulnerable to a technical sell-off at any time, but we’ll take it as a friendly/supportive factor for now. December corn finished the day up about a nickel. Today’s high was $6.99 1/2. The $7 level still looks like a sellers’ haven. The November soybean contract traded as high as $14.05 today and then finished about unchanged at $13.95 3/4. USDA announced 18.6 million bushels of export sales to China and Unknown Destination this morning. That’s on top of the 19.3 million bushels to China announced yesterday. Seems that China is back! Wheat futures did violate the upward-trending channel yesterday and closed under that line again today (even though Dec wheat was up a dime). Wheat is living in it’s own world right now, though. It’s more about how much trouble Putin wants to cause for wheat exports out of the Black Sea than anything else.
Holy Cow! The DJIA traded a 1,508-point range today. It traded under 28,660 at the low and 30,168 at the high late in the session. There are a lot of years in history we haven’t traded 1,500 points wide in the whole year. Today’s rally was counter-intuitive. The Consumer Price Index for September reported this morning was a bit higher than expected at 8.2%. Wages increase at 5% from a year ago puts the focus on how inflation is hurting everyone. Seems the marketplace simply wanted to step away from the “edge of the cliff” and see what’s coming next. The U.S. dollar index was sharply lower, down .97 points on the day. Nearby crude oil was up $1.84 and settle just over the $89 level.
Here’s some more follow-up on yesterday’s USDA reports. Let’s take a closer look at the yield estimates. As you can see in the chart below, the USDA has the U.S. corn yield at 171.9 bpa. It’s down from the 177 bpa trend-line yield USDA was using a few months ago. However, if the current guess is realized it’s still the 5th best yield in history and only down 3% from last year. There’s room for this to slide either way. We did mention yesterday that the USDA has dropped the U.S. yield in September and October just 11 times in history and 2/3 of the time it drops again into the final yield estimate.
And, here are some state yield estimates. IL is now expected to tie the record yield (2018) at 210 bpa. We have some doubts about that. Just not hearing a lot of field reports of record-breaking yields. Same for IA at 204 vs 205 bpa record yield last year and for IN at 187 vs 195 bpa record yield last year. Also, worth noting…..the NE and KS corn yields are expected to be down 22-24 bpa from last year. Non-irrigated dryland yields got hit hard this year.
The USDA has the U.S. soybean yield at 49.8 bpa. It’s down from the 51.9 bpa trend-line yield USDA was using a few months ago. However, if the current guess is realized it’s still the 5th best yield in history and only down 4% from last year. There’s room for this to slide a bit lower as well.
And, here are some state yield estimates. IL and IN now expected to fall just 1 bpa short of their record yields set last year. We also have some doubts about that. Same as corn, just not hearing a lot of field reports of record-breaking yields. IA at 58 bpa is down 5 bpa from the 63 bpa record yield last year. Also, worth noting…..the NE and KS soybean yields are expected to be down 12-14 bpa from last year.
That’s all for now, see you here tomorrow.
