Morning Comments September 30, 2021

Grain bins dryer

Markets are mixed to a touch firmer this morning after a stronger day yesterday. 

December corn is doing its best to work back towards $5.50 ahead of today's Quarterly Stocks update. As we mentioned yesterday, it's hard to remember what all took place a year ago to take us from the most bearish fundamental outlook we had seen in years to the most bullish one, but major adjustments lower to stock figures were definitely one of the largest catalysts. 

Ahead of today's figures at noon eastern, traders are expecting the USDA to show 1.16 billion bushels of corn available as of September 1st, this would be down 32 million bushels from the WASDE 2020/21 crop year ending stocks estimate of 1.187 billion bushels. 

In soybeans, traders are expecting the USDA to show there was 174 million bushels available at the end of the old crop marketing year, versus the WASDE estimate from earlier this month of 175 million.

With today's figures being the final old crop carryover print the WASDE branch of the USDA will use in new crop supply and demand estimates going forward, they could have a tremendous influence on price if they are far removed from what traders are anticipating. A larger-than-anticipated figure would give us more available supply in the year ahead, while a smaller-than-expected figure would do the opposite.

Of course, these figures alone will not be the only thing to influence price, but they can definitely change short-term direction as we have seen so many times before.

There was lots of chatter yesterday about power cuts potentially disrupting China's harvest, "threatening global food supply,” according to one well-followed media source. Interesting to think anyone would believe a country would allow crops to rot in the name of emission curbs or lacking coal supply, but it is 2021. In reality, many end users or those responsible for handling freshly harvested crops are bringing in generators as back-up if power outages remain widespread for a significant amount of time.

Never underestimate the farmer's ability to get crops off even in less-than-ideal circumstances. 

Energy figures yesterday showed a surprise increase in U.S. oil stocks. Traders had been anticipating another reduction. Ethanol figures weren't overly supportive either as we saw a reduction in production versus the expected increase, with stocks slightly increasing unexpectedly as well. 

Looking ahead, we will get updated export sales figures this morning at 8:30 eastern ahead of Quarterly Stocks at noon eastern. Traders are expecting relatively decent soybean sales as there has been a decent level of Chinese business rumored to have been done over the last week. Corn sales to Mexico and other traditional customers should keep those figures reasonably elevated as well.

Gulf movement is starting to pick up with only 2 facilities in the area unable to load at this time. However, capacity continues to lack with some reports indicating that though facilities are open we're still hanging out around half of our overall shipping capacity in the region due to a whole host of logistical and operational headaches. 

Outside of export sales and quarterly stock updates we will want to continue to monitor movements in the dollar as the greenback has quietly worked its way back to the highest level seen since last November. Of course, a stronger dollar makes our commodities more expensive to the global market and could work as a headwind to potential export business in the months ahead.

Corn 1-2 higher

Beans steady/mixed