TFM Morning Update 08-27-2024

CORN

The corn market is trading toward the lower end of its rather tight 3 1/4 cent range (December) on the prospect of a large upcoming crop with generally high crop conditions.
Yesterday afternoon the USDA released its weekly crop progress report that showed the corn crop’s good to excellent ratings drop 2% points to 65%. While the drop is noted, the ratings remain historically good, 9% above last year and 7% above the 5-year average.
The corn market may face additional selling pressure this week with Friday being First Notice Day Friday for the September futures contracts, and basis contracts needing to be priced before then.
Yesterday managed funds were active sellers in the corn market, selling an estimated 6,000 corn futures contracts. This brings their current estimated net short position to 272,000 contracts.

The soybean market, like corn, is trading toward the bottom of its range as it consolidates after an initial upside move following a decrease in the crop’s good to excellent ratings.
In yesterday’s weekly crop progress report, the USDA dropped the soybean crop good to excellent ratings 1% to 67% where the trade was anticipating no changes. The crop’s ratings remain historically high versus last year’s 58% G/E rating, and the 5-year average of 59% at this time of year.
Some of the best crop conditions are found in LA, MS, AR, MO, IA, and NE, while below trend conditions are seen in TN, KY, and ND.
Managed fund activity in the soybean complex was relatively light yesterday, with the funds net buying an estimated 1,000 soybean futures contracts and 2,000 oil contracts, while being even in the meal. They are currently estimated to be short 185,000 soybean contracts, 87,000 soybean oil, and long 2,000 meal.

The wheat complex is trading mostly lower across all three classes as technical selling continues to weigh on prices following new contract lows in yesterday’s session.
The USDA rated the US spring wheat crop at 69% good to excellent, down 4% from last week’s 73% G/E rating. The harvest is also moving along at a good clip, at 51% complete. Though this is slightly behind last year’s pace of 54% complete and the 5-year average of 56%.
Despite production and quality concerns over the European wheat crop, Matif wheat futures have continued to trade lower in recent days, which has pressured US prices. Much of this pressure has likely come from lower Russian export prices, which have trended lower as Russia continues to dominate the world export market.
Managed funds were seen as net sellers in Chicago wheat yesterday, selling an estimated 3,000 futures contracts. This brings their current estimated net short position to 65,000 contracts.

Scott Masters