Special Market Update
Grain Market Commentary
Tuesday, August 11, 2020
By Tiffany Weitzel, Originations Merchant, The Andersons
Another week of lower trade has passed with corn finishing last week down 7 cents; Soybeans down 25; soymeal down 11; soyoil unchanged; soft red wheat down 35; and hard red wheat down 36.
Not much new to the story as weather remains not ideal but favorable in most of the country. In general, throughout August we continue to see crop conditions decline each week, however last week they remained the same and this week the decline was null. Corn was 71% good to excellent down 1% from las week while soybeans were up 1% to 74% good to excellent.
The big news maker is expected this Wednesday as the USDA Supply & Demand report will be released. This will be the first survey-based yield estimate from NASS. The last reports, which is based on weather adjusted yield models, has US corn at 178.5 and beans 49.8. Analysts are predicting a bearish report, estimating corn yield at 180.5 and beans at 51.2. This is the largest corn crop and second largest bean crop the USDA has ever predicted in August. The August report has a history of not being friendly. Except for 2016, most-active corn futures fell between 2.9% and 6% on report day in the last five years. For soybean futures, the decline ranged from 1.4% last year to 6.3% in 2015.
Looking at the technical perspective the corn daily stochastics gave a bullish indictor with a crossover up for Dec20. We see resistance at 3.245 and support at 3.215 Soybeans show short term negative with momentum studies declining but tipping to oversold levels. Mondays close higher after creating new lows may indicate at least a temporary floor has been established. Resistance is at 8.785 and support at 8.68. Wheat momentum studies also show bearish and oversold on an RSI under 30. Resistance at 4.945 and support at 4.875
The USDA announced three flash soybean sales Monday, two of which were to China. The steady continued purchases have offered some support.
Weekly export inspections show corn 14% behind last year and also down 14% for the season. Beans are down 5% yoy while wheat is up 2% yoy but forecasting a 2% decrease on the year.