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Grain Market Recap: 

Grain bulls will be happy to put this week behind them, and head into a long Labor Day Weekend. Much has been made about demand (or lack thereof) in recent weeks/months in the grain complex. Well, November soybeans managed to close the week lower despite flash sales being reported each day this week. December corn managed to claw back some of the losses accrued earlier in the week, but also closed the week lower. Early in the week, it looked like December wheat was looking to hammer out a bottom, but managed to record a new contract low on Thursday, and retested those lows on Friday. 

 

Corn: 

Corn started the week moving higher early Monday morning after a flash sale of 123,000 metric tons (4,842,294 bus) was reported for delivery to Mexico during the ‘23/’24 crop year. Unfortunately, the contract was unable to maintain its gains on Tuesday, and proceeded to move lower on both Wednesday and Thursday as well. Thursday’s trade was a frustrating chop bouncing on either side of unchanged. But it served as the status-quo as of late with bulls’ fight not being able to withstand a higher close. Friday brought a new month, and hopefully a new hope for corn bulls. We managed to close 3-2 cents higher on Friday, clawing back some of the week’s earlier losses, settling at 481-4. For the week, December corn was 6-4 cents lower. Managed funds managed to trim their net-short position by nearly 30,000 contracts, but still hold a considerable net-short position of 91,131 contracts. Broken down, that is 259,408 short positions compared to 168,277 contracts. If we see substantial short-covering in next week’s trade, it could lay the foundation for December corn to retest 500.

 

Soybeans: 

There’s no other way to put it - price action on the November soybean contract this week was frustrating. Flash sales were reported each day of this week to either Chinese or Unknown Destinations for ‘23/’24 delivery, totaling 1,138.1k Metric Tons (41,818,003 bus). Sure, this is typically the time when demand for U.S. soybeans begins to rise, and we’d gotten off to a slower-than-usual start.. But, it is atypical to experience flash sales each day of a trading week, and manage to close lower. Price action on Friday was arguably the most deflating. Before Friday morning’s open, we rallied 13 cents, effectively eliminating most of Thursday’s losses. As soon as the 8:30 AM bell rang Friday morning, the contract started shedding those gains immediately. For the session, we managed to close just ½ a cent higher at 1369-2. The day prior, we filled the gap from June 31st, between 1382 and 1385, and bears were insistent on not letting the contract close within that range to end the week. We remain just below our 1373-1381 pivot pocket, and if the contract comes under additional pressure to start next week, we may test 3-star support between 1350 and 1355. Interestingly, we managed to move lower in spite of managed funds adding to their net-long position. Funds added 30k contracts to their net-long position this week, now holding a 84,892 net-long position. That is 118,276 long positions versus 33,384 short positions. If funds begin to unwind those long positions, that could be the catalyst to retest that 3-star support pocket. 

 

 

Wheat: 

Halfway through the week, it looked as if the December wheat contract was in the process of hammering out a bottom. Unfortunately, we managed to make a new contract low on Thursday, trading down to 593-4. After scoring the new low, the contract temporarily turned higher, rallying back 8-4 cents to close at 602 on Thursday. It seemed as though Thursday’s late session strength could also be a sign of a turn around, but it unfortunately was not. We also started the day higher on Friday, before ultimately retesting, and closing near the contract low by settling 6-4 cents lower at 595-4 - just a tick off of Friday’s intraday low. As mentioned in Friday morning’s Grain Express, hammering out a low isn’t a singular price - it’s a process. We may still be early in that process. For the week, December wheat was down 26-2 cents. Managed funds added to their net-short position this week, now holding an 83,808 contract net-short position. Broken down, 57,152 long positions compared to 140,960 short positions. 

 

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