Grain markets have been choppy through much of today’s trade with little new news to offer conviction to the Bulls or the Bears ahead of a long weekend.
Grain markets have been choppy through much of today’s trade with little new news to offer conviction to the Bulls or the Bears ahead of a long weekend.
Grain Market Recap:
It was a mixed bag to close the month of August. Corn bulls are surely eager to turn the calendar over to September, after closing the month 34-6 cents lower – ultimately settling at 478-2. Meanwhile, soybeans were 37 cents higher on the month settling at 1368-6. The bean:corn ratio will be worth monitoring over the next month, as its currently sitting at 2.86 – the highest it’s been in approximately 7 years, and eerily similar to 2013.
Corn:
The word of the day is Microcosm. Miriam-Webster defines microcosm as, “A community or other unity that is an epitome of a larger unity”. That is a very apt summation of today’s price action in the December corn contract. After selling off sharply at the open, the low for the day was cemented just an hour into the trading session at 476-6. Shortly after, we rallied all the way back into positive territory, trading 10 cents higher to 486-6 around 10:05 AM CST. December corn ultimately settled 2-4 cents lower at 478-2, gradually moving lower through the duration of the session. Seasonally, the month of September is more friendly to December corn than August is. We’ve seen progressive consolidation in trading ranges throughout the month of August by continually testing 500. It’s not unreasonable to expect the contract to rally back within historically average ranges for the soybean:price ratio if flash sales for both corn and soybeans permeate early in the month.
Soybeans:
While November soybeans ended the month markedly better off than December corn, daily price action on the November soybean contract was arguably more disappointing. After moving sideways through the duration of the overnight session, the contract sold off 5-6 cents just 5 minutes after today’s open. Bulls did their best to defend the 1377-1380 range for the next few hours, but the contract effectively limped into the close. For the day, November soybeans settled 18 cents lower at 1368-6, with the low price for the session coming in just ¼ cent lower than the final settlement. Settling below our 4-star support pocket between 1373 and 1381 is far from ideal, but it could be chalked up to end-of-month position flattening. At the end of the day, we have 3 million fewer acres planted than expected this spring, and soybean demand has markedly improved over the past 4-5 weeks.