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Grain Market Recap: 

After an encouraging export sales report this morning, price action was somewhat disappointing. All of the major contracts - December corn, November soybeans, and September wheat - all closed higher, but the gains were materially insignificant. Effectively, market participants said, “prove it” ahead of tomorrow’s WASDE report. 

Corn: 

Before today’s open, new crop corn sales beat expectations for the week, totalling 758,000MT (200,000-600,000 MT range of expectations). Unfortunately, the December corn contract only managed to close the session 2 cents higher at 496-2 - unable to even break back into our 497-502 pivot pocket. Yield estimates in tomorrow’s WASDE report average out to 175.5 BPA (172.4-178.0 range of expectations). An upside-surprise will not bode well for corn bulls. Moreover, total production and domestic export demand for corn will have to be closely monitored. 

Soybeans: 

Today’s November soybean trade closed 9-6 higher, settling at 1318-2. Most importantly, the rally was rejected near the exact midpoint of our 3-star resistance pocket (1324-1334), topping out at 1328. Fundamentally, soybeans have the most support of the grain complex. We have 3 million fewer acres than we thought we’d have before the June 30th report, and new crop sales commitments have picked up over the last three weeks. But, the bleak demand outlook for the other components of the grain complex are taking the wind out of soybeans' sails. The average range of estimates for bean yields in tomorrow’s WASDE report range between 50.5 and 52.0 BPA (51.3 average). A downside surprise in yield/total production  estimates for U.S. soybeans in tomorrow’s USDA report will be significant if the pace of export commitments over the past three weeks maintains through the balance of harvest season. 

Wheat: 

The September wheat contract has sold off sharply through the balance of this week so far, but it managed to close 2-6 cents higher to 637-6 today. Like corn, new crop wheat sales came in above expectations totaling 568,000 MT (200,000-500,000 MT range of expectations). This week’s sales were encouraging, but we need to stack multiple weeks of strong sales together in order to pull the September wheat contract off of the mat. Expectations are for wheat production to be unchanged in tomorrow’s report - totaling 1,739,000,000 bushels. Nonetheless, the demand for American wheat needs to prove itself in order for the wheat contracts to sustain a rally.

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