Grain Express 10/13/22
Posted: Oct. 13, 2022, 7:54 a.m.
USDA Report
Yesterday's USDA report showed the national average corn yield at 171.9 bushels per acre, up .1 from last month. As you'd expect this raised production slightly. Perhaps the biggest surprised in yesterday's report was the drop in the soybean yield, from 50.6 to 49.8; the average analyst was expecting to see it unchanged from last month's report, 50.5.
South America
Yesterday's USDA report also included updated production estimates for South America. Argentina's old crop corn production was lowered 1.5mmt while Brazil's was unchanged. For soybeans, Argentina's production was left unchanged with Brail's production adding 1.0mmt.
A Look at the Outside Markets
All is calm before the storm (CPI/Inflation data out at 7:30am CT). Indices are slightly higher in the early morning trade with crude oil hovering around unchanged. Precious metals have rebounded some on the back of a marginally lower US Dollar. Analysts are looking for CPI to come in at 8.1% year over year.
Corn
Corn futures were all over the place yesterday, trading in a 20-cent range in the first few minutes following the USDA report. For the better part of the last month or two we've been talking about there being a lot of opportunities on both sides of the market, with a bigger emphasis on selling rips than buying the dips. The market has been resilient though, it has had multiple opportunities and reasons to break lower, but it can't. This has us moving our short-term bias into bullish territory. For clients who also have a bullish bias, we were working with them to get some long exposure yesterday via limited risk options spreads. Feel free to contact the trade desk to learn more: 312-278-0500.
Seasonal Trend in Play: December corn has been higher from October 10th-October 20th for 13 of the last 15 years.
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Soybeans
Soybeans made a move about the psychologically significant $14.00 level which took the market straight to our 3-star resistance pocket, 1407 1/2-1415 3/4. The market did back off and close back to $14.00. Our bias remains Neutral/Bullish, aka cautiously optimistic. If the Bulls can chew through that resistance pocket, it could spark a bigger move, back towards the top end of the multi-month range, in the neighborhood of 1460/1470.
Seasonal Trend in Play: November soybeans have been higher from October 4th-October 27th for 13 of the last 15 years.
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Wheat
Wheat futures broke below trendline support yesterday bit were able to defend last week's lows. As mentioned in yesterday's commentary, a break and close blow those lows, 873-880, could trigger additional selling pressure down towards 839-849. Also mentioned in yesterday's report and many times this year: if you don't need to trade wheat, you may be better off preserving your mental capital for another market.
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